In a recent case before the Supreme Court (“SC”), the issue was whether the maternity benefits, as contemplated in the Maternity Benefit Act, 1961 (“Act”), would apply to a lady employee appointed on contract if the period for which she claimed such benefits overshot the contractual period. The SC, in its judgment, directed the employer to provide maternity benefit in accordance with Sections 5* and 8** of the Act, even after the contractual employment period came to an end. The SC emphasized that the law itself envisions the extension of these benefits beyond the employment term, highlighting that the entitlement to medical benefits specified under Section 5 of the Act extends beyond the employment duration.
Referring to Section 12(2)(a)*** of the Act, the SC highlighted that the statute inherently supports the continuation of maternity benefit, even if the employment ends, ensuring that the maternity benefit persist despite the termination of employment. Thus, SC pointed out that, by virtue of operation of section 27****, the Act overrides any agreement or contract of service found inconsistent with the Act. Hence, SC held that once the employee fulfilled the entitlement criteria of having worked for a period exceeding 80 days in the 12 months immediately preceding the date of her expected delivery, as specified in Section 5(2) of the Act, she would be eligible for full maternity benefit even if such benefits exceed the duration of her contract. Any attempt to enforce the contract duration term within such period by the employer would constitute “discharge” and attract the embargo specified in Section 12(2)(a) of the Act. The law creates a fiction in such a case by treating her to be in employment for the sole purpose of availing maternity benefit under the Act.
Source: Supreme Court
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*Section 5: Right to payment of maternity benefit-
(1) Subject to the provisions of this Act, every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence, that is to say, the period immediately preceding the day of her delivery, the actual day of her delivery and any period immediately following that day.
Explanation. —For the purpose of this sub-section, the average daily wage means the average of the woman’s wages payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity, the minimum rate of wage fixed or revised under the Minimum Wages Act, 1948 (11 of 1948) or ten rupees, whichever is the highest.
(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:
Provided that the qualifying period of eighty days aforesaid shall not apply to a woman who has immigrated into the State of Assam and was pregnant at the time of the immigration.
Explanation. —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.
(3) The maximum period for which any woman shall be entitled to maternity benefit shall be twenty-six weeks of which not more than eight weeks shall precede the date of her expected delivery:
Provided that the maximum period entitled to maternity benefit by a woman having two or more than two surviving children shall be twelve weeks of which not more than six weeks shall precede the date of her expected delivery:
Provided further that where a woman dies during this period, the maternity benefit shall be payable only for the days up to and including the day of her death:
Provided also that where a woman, having been delivered of a child, dies during her delivery or during the period immediately following the date of her delivery for which she is entitled for the maternity benefit, leaving behind in either case the child, the employer shall be liable for the maternity benefit for that entire period but if the child also dies during the said period, then, for the days up to and including the date of the death of the Child.
(4) A woman who legally adopts a child below the age of three months or a commissioning mother shall be entitled to maternity benefit for a period of twelve weeks from the date the child is handed over to the adopting mother or the commissioning mother, as the case may be.
(5) In case where the nature of work assigned to a woman is of such nature that she may work from home, the employer may allow her to do so after availing of the maternity benefit for such period and on such conditions as the employer and the woman may mutually agree.
**Section 8- Payment of medical bonus:
(1) Every woman entitled to maternity benefit under this Act shall also be entitled to receive from her employer a medical bonus of one thousand rupees, if no pre-natal confinement and post-natal care is provided for by the employer free of charge.
(2) The Central Government may before every three years, by notification in the Official Gazette, increase the amount of medical bonus subject to the maximum of twenty thousand rupees.
***Section 12- Dismissal during absence or pregnancy:
(2)(a) The discharge or dismissal of a woman at any time during her pregnancy, if the woman but for such discharge of dismissal would have been entitled to maternity benefit or medical bonus referred to in section 8, shall not have the effect of depriving her of the maternity benefit or medical bonus:
Provided that where the dismissal is for any prescribed gross misconduct the employer may, by order in writing communicated to the woman, deprive her of the maternity benefit or medical bonus or both.
****Section 27- Effect of laws and agreements inconsistent with this Act:
(1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement or contract of service, whether made before or after the coming into force of this Act:
Provided that where under any such award, agreement, contract of service or otherwise, a woman is entitled to benefits in respect of any matter which are more favourable to her than those to which she would be entitled under this Act, the woman shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that she is entitled to receive benefit in respect of other matters under this Act.
(2) Nothing contained in this Act shall be construed to preclude a woman from entering into an agreement with her employer for granting her rights or privileges in respect of any matter, which are more favourable to her than those to which she would be entitled under this Act.
