MATERNITY BENEFITS: CURRENT LAW & ANALYSIS (ARE CONSULTANTS ALSO ELIGIBLE FOR MATERNITY BENEFIT?)

MATERNITY BENEFITS: CURRENT LAW & ANALYSIS

Preamble to Maternity Benefit Act read as follows:

“An Act to regulate the employment of women in certain establishment for certain period before and after child-birth and to provide for maternity benefit and certain other benefits”

In section 3, clause (O) the definition of women is given as “woman” means a woman employed, whether directly or through any agency, for wages in any establishment.

Does this act apply to all organizations?

Yes, in section 2, subsection 1 clause b “to every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months”.

"commercial establishment" means any premises wherein any trade, business or profession or any work in connection with, or incidental or ancillary thereto is carried on and includes a society registered under the Societies Registration Act, 1860 (21 of 1860) and charitable or other trust, whether registered or not, which carries on any business, trade or profession or work in connection with or incidental or ancillary thereto, journalistic and printing establishments, contractors and auditors establishments, quarries and mines not governed by the Mines Act, 1952/(53 of 1952) educational or other institutions run for private gain and premises in which business of banking, insurance, stocks and shares, brokerage or produce exchange is carried on, but does not include a shop or a factory registered under the Factories Act, 1948 (63 of 1948) or theatres, cinemas, restaurants, eating houses, residential hotels, clubs or other places of public amusement or entertainment.

Who are Eligible For Maternity Benefits:

1) Under Section 5(2), No woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom she claims maternity benefit, for a period of not less than Eighty days in the twelve months immediately preceding the date of her expected delivery. Further for the purpose of calculating under this sub-section the days on which a woman has actually worked in the establishment, the days for which she has been laid off or was on holidays declared under any law for the time being in force to be holidays with wages during the period of twelve months immediately preceding the date of her expected delivery shall be taken into account.

2) Section 2(2) read along with section 5A & 5B do state that those earning less than 21000/- per annum and are covered under section 50 of ESI Act shall not be eligible for these benefits. They must take the benefits under ESI Act.

WHAT MATERNITY BENEFITS ARE TO BE PROVIDED UNDER THE NEW AMENDED LAW?

1) Duration of paid maternity leave for a woman having less than two surviving children has been increased from 12 weeks (with not more than 6 weeks preceding the expected date of delivery) to 26 weeks (with not more than 8 weeks preceding the expected date of delivery);

However for those women who are expecting after having 2 children, the duration of the leave remains unaltered at 12 weeks.

2) Paid adoption leave (if the adopted child is less than three months old) and paid surrogacy leave of 12 weeks from the date when the child is handed over, has been introduced;

3) The Act has introduced an enabling provision relating to “work from home” that can be exercised after the expiry of 26 weeks’ leave period.

Depending upon the nature of work, a woman can avail of this provision on such terms that are mutually agreed with the employer.

4) The amended Act has mandated crèche facility for every establishment employing 50 or more employees. The women employees should be permitted to visit the facility 4 times during the day.

6) The amended act makes it compulsory for the employers to educate women about the maternity benefits available to them at the time of their appointment.

ARE CONSULTANTS ALSO ELIGIBLE FOR MATERNITY BENEFIT?

The words used in the preamble are “Regulate the employment of women” and in the definition of “women” the word used is “Employed”. The Justice Gardiner remarked “It seems to me that to constitute employment there must be control by the employer over the employee - the right to give the employee instructions as to what he is to do."

Justice Saunders remarked ““Largely read, employment may refer to work, or an activity in which a person receives valuable consideration .... More narrowly read, employment may refer to the position of a person in the service of another or performance of services under a contract of service...."

While the clarification does not go into specifics on this aspect, it seems that given this definition, a woman engaged as an independent consultant would not have the benefit of the MB Act. Needless to mention, in the light of certain judicial pronouncements, exceptions involving certain types of consultant engagement may have to be examined.

Let us make an analysis of employer employee relationship, Bench of Hon'ble Supreme Court comprising H.L. Dattu, R.K. Agrawal and Arun Mishra, JJ. vide its Judgment dated 25.08.2014 in the matter Balwant Rai Saluja & ANR. Vs. Air India Ltd. & Ors.1 held that it is not the test of sufficient control, but the test of effective and absolute control which would be relevant to decide the employer-employee relationship. So if a contract with a employee is such that it gave him/her sufficient freedom to be treated on principal to principal basis then it will not be an employment contract.