Who’s heard the Good News? Maternity Benefit Amendments: An Insight


In, what is one of the most progressive steps for working women, the Parliament has passed Maternity Benefit (Amendment) Act 2017 (“Amendment Act”). The Amendment Act received presidential assent on 27th March 2017 and was published in the official gazette on 28th March 2017. The Ministry of Labour and Employment has issued further Maternity Benefit (Amendment) Act, 2017 – Clarifications on 12th April 2017 to clarify the numerous queries that they have been receiving (“Clarification”).

Benefits under the Maternity Benefit Act is applicable to all mines, plantations, shops and establishments (having 10 or more employees) and factories. Maternity Benefit Act, 1961 (“Act”) is applicable to all women who are employed in any capacity directly or through any agency, i.e., either on contractual basis or as consultant etc in the organised sector[1]. Further, Section 12 of the Act emphasizes that any dismissal or discharge of a woman during the pregnancy is unlawful and such employer can be punished under Section 21 of the Act.

Summarised below are all the key changes proposed by the the Amendment Act:

(i) Maternity leave available to the working women to be increased from 12 (twelve) weeks to 26 (twenty-six) weeks for the first 2 (two) children. Maternity leave for children beyond the first 2 (two) will continue to be 12 (twelve) weeks.
(ii) Maternity leave of 12 (twelve) weeks to be available to mothers adopting a child below the age of 3 (three) months as well as to the “commissioning mothers”. The term “commissioning mother” has been defined as biological mother who uses her egg to create an embryo planted in any other woman.
(iii) Every establishment with more than 50 (fifty) employees to provide for crèche facilities for working mothers and such mothers will be permitted to make 4 (four) visits during working hours to tend to the child in the crèche.
(iv) The employer may permit a woman to work from home if it is agreeable to do so.
(v) Every establishment will be required to make these benefits known to women hired from the time of her appointment.

Interestingly, the provisions of the Amendment Act required to be separately notified for each of them to come into force. Except with respect to the provision mandating that every establishment having 50 (fifty) or more employees shall provide for a crèche facility (which shall be applicable from 1st July, 2017), all the other amendments sought to be brought about into effect by the Amendment Act have come into effect on 1st April, 2017.

Further light was thrown upon some of the amibiguities that arose vis-à-vis the applicability of the Amendment Act through the Clarification issued recently:

(i) Enhanced maternity benefit as provided for by the Amendment Act can be extended to women who were already on maternity leave as of 1st April, 2017.

(ii) Enhanced maternity benefit as provided for by the Amendment Act cannot be extended to women who have, as of 1st April, 2017, already resumed work after availing the 12 (twelve) weeks of maternity leave.

Some common questions that are still required to be answered are:

What are the guidelines for the crèche facility to be adopted by a Company having several establishments?

The Amendment specifies that the crèche shall be made available by the employer in every establishment where there are 50 (fifty) or more employees. It is pertinent to note that, the provision of crèche applies to an establishment having more than 50 (fifty) employees not women employees. The reasoning is of course to ensure that corporates do not restrict the hiring of women.

Where a single entity has several establishments, whether in the same city or otherwise, the requirement of providing crèche facility is applicable only to such of the establishments of the entity where the number of employees exceeds 50 (fifty).

What is the employer’s liability in providing the crèche facility? Should employers bear the cost for the crèche facility, allow for time-off for the mothers to go visit the child, etc.? Do establishments need to have an in-house crèche facility?

Since the Amendment Act provides that a crèche facility will need to be provided by the employer, the cost of providing such facility would by extension require to be borne by the employer. However, no rules in relation to this aspect of the Act are yet in force. Whether employers may require the woman to bear a portion of the facility cost i.e. impose charges and to what extent such charges may be imposed is to be seen.

The mother should be allowed 4 (four) visits to the crèche in a day which shall be inclusive of the rest period prescribed to a woman by the establishment.

As per the Amendment Act, the crèche facility shall be established by the employer within such distance, from the establishment, as prescribed by the government from time to time. Therefore, there is no requirement to have the crèche facility in house, if established within the prescribed distance. Of course, the government is yet to prescribe such distance.

Do all women now have a right to demand work from home post maternity?

The provision relating to work from home requires consent of the employer and does not permit the woman employee to demand the same as a matter of right.

The Amendment Act is a step in the right direction towards protecting maternal and child health as highlighted by several national and international expert bodies such as the WHO, Law Commission of India and the Indian Labour Conference. However, the Amendment Act requires the employer to pay full wages during maternity leave and this could increase costs for employer resulting in preference for employing male workers. Unless a workable funding model is introduced, where the maternity benefits are financed by a combination of funds from the employer and the government or (like in the case of Scandinavian countries) solely by the government through national social security benefits, it could have an adverse impact on the job opportunities available for women.

Some final thoughts

On a separate note, there are various labour laws in India that provide maternity benefits to women in different sectors (The Act, Employee State Insurance Act, 1948, All India Services (Leave) Rules), 1955, Central Civil Services (Leave) Rules, 1972 etc.). However, these laws differ in their coverage, benefits and the financing of the benefits. A uniform regulation to provide maternity benefit to all working women across all sectors and industries in India, is the need of the day.

The enforcement and commencement of laws in India has always left much to be desired. But for the first time great gumption is seen in legislative intent. The Parliament has passed what is probably in the history of this country a very progressive legislation, that in fact puts India higher than developed countries like US and UK in terms benefits to working women. The missing piece of the pie however, is the lack of government contribution either through tax incentives or subsidising maternity leave. Corporates therefore may be more cautious than ever now in employing women.

[1] This has been further confirmed through the Clarification. The Clarification further emphasizes that women in the unorganized sector would be entitled to avail benefits under the Maternity Benefit Act. The actual applicability of this remains to be seen.

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