What Does Proposed Amendment To Maternity Benefit Mean For Contractual Labour?

Women in self-employment or in casual (contractual) workers, do not share in India's growth story. The Periodic Labour Force Survey (PLFS) data for 2017–18 demonstrates that only women in "regular employment", defined narrowly as consistent hours of work not including wages or working conditions, have seen a somewhat consistent increase over the last three decades.

India   |   13 Nov 2020 12:44 PM GMT / Updated : 2020-11-13T18:30:53+05:30
Writer : Vasudevan V | Creatives : Abhishek M
What Does Proposed Amendment To Maternity Benefit Mean For Contractual Labour?

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Note from the Editor: 'Explainers' are a new series at Ungender Insights. A question to consider with regard to the maternity benefit law is to ask what position contract workers occupy in law? It stands to reason, that for women contractual workers, wages and other conditions of work are critical. This article examines the current Maternity Benefits Law and how it applies in particular to contractual labour.

In May this year, several news reports suggested that a variety of state governments in India were contemplating amendments to labour law, which according to experts, disproportionately intended to negatively impact women contract labour. Among other proposed amendments, sweeping changes to the maternity benefits act were also debated among other measures such as equal pay, safe working conditions, basic food and water, lighting and transport and overtime fees, the argument made in favour of amendments suggests that a more business-friendly environment will be created.

From a workplace and justice lens, the maternity benefit law is vital. Labour laws apply to that area of activity where workers are working under a "contract of employment". Working women, especially, in informal labour arrangements, are a large absolute number.

Census 2011 data demonstrates that female migration for employment and business grew from 12% to 16% between 2001 and 2011, the same data also demonstrates that there is a shift in the pattern of female labour migration from predominantly rural destinations to urban. Forty-seven percent of all women migrating for work/business were in urban areas in 2001, by 2011 migration to urban destinations had jumped to 58%.

The Periodic Labour Force Survey (PLFS) data for 2017–18 demonstrates a dramatic fall in work participation rates (WPR) among rural women from 24.8% to 17.5% (a fall of almost 25 million women workers) in rural India after 2011–12. While the decline is broad, it is most intense for women from Scheduled Castes (SC) and Scheduled Tribes (ST) categories. Meanwhile, in urban India, stagnation in terms of female WPR has continued to be worrisome at a lowly 15% and 14% across the last decade.

Women in self-employment or in casual (contractual) workers, do not share in India's growth story. The data demonstrates that only women in "regular employment", defined narrowly as consistent hours of work not including wages or working conditions, have seen a somewhat consistent increase over the last three decades.

PLFS 2017–18, also tells us that manufacturing workers constituted the single largest occupation for the female workforce in urban areas, followed by textile and garment workers, food processing, tobacco products (beedi workers) and leather goods. Teachers constituted another big chunk as are domestic workers (care workers) followed by salespersons, housekeeping and restaurant services workers, clerks and in other occupations. All these occupations function on contracts.

For a greater overview of labour law and women, click here to view.

What position do these contract workers occupy in law? It is reasonable to assume that the nature of ­coercion experienced by these women workers with unimaginable levels of job insecurity, and increased cost and demands of urban living, is qualitatively different from those felt and experienced by men. For these workers, wages and other conditions of work are critical. This article does not get into the nature of changes proposed by state governments in recent times, but does instead, examine the current Maternity Benefits Law and how it applies in particular to contractual labour.

Do Maternity Benefits Apply To Contractual Labour

Yes; As per section 2(o) of the Act, it applies to a woman employed, whether directly or through any agency, for wages in any establishment. Therefore, the benefits under this law cover all women who are employed on contractual, casual, fixed-term, including consultants.

Here is what the law provides;

🡒 A medical bonus of Rs.3500/- if there is no free pre or post-natal care given.

🡒 Leave with wages for miscarriage for a period of 6 weeks, following a miscarriage

🡒 Leave with wages for a tubectomy operation for a period of 2 weeks

🡒 Leave for illness arising out of pregnancy, delivery, premature birth, etc., subject to a maximum of 1 month

🡒 Where a woman has availed due leave as permitted under the Act, she can't be discharged or dismissed either during such leave or on such a day where the leave expires, citing absence on such date of expiry.

🡒 Conditions of service can't be modified to her disadvantage during the intervening period, a ploy popularly used by effecting change like transfers, to discourage a woman employee from pursuing her career.

The Employees' State Insurance Corporation Act, 1948, an Act enacted to provide for certain benefits to employees in case of sickness, maternity and employment injury, covers women who are employed, wherever the establishment is covered under this Act, and not the Maternity Benefit Act. However, if a woman employee crosses the ceiling of wages prescribed under the ESI Act (currently at ₹21,000/-) at any point of time, then the Maternity Benefit Act applies to her during such period.

How Effective Are Maternity Benefits

In Municipal Corporation of Delhi vs Female Workers (Muster Roll) & Anr 2000 I CLR 879 (S.C.), the Supreme Court held that the provisions of the Maternity Benefit Act, 1961 are;

Wholly in consonance with the Directive Principles of State Policy as set out in Article 39 and in other Articles, especially, Article 42 of the Constitution of India. It further held that just social order can be achieved only when inequalities are obliterated and everyone is provided what is legally due. Women who constitute almost half of the segment of our society have to be honoured and treated with dignity at places where they work to earn their livelihood.

Unfortunately, several organizations continue to avoid recruiting women, or worse still pre-screen women to avoid employing women who they perceive might decide to become mothers. All too often, women on contract, or engage in casual labour, either lack a contract completely or don't understand their own contracts. There are even instances where a woman employee is conveniently discharged either by asking to go, resignation or termination of the contract, midway through their pregnancy.

For most women, as with men, employed in contractual labour – the functional operating requirements of any field or on-site industry requires workforce to perform manual labour with little or no space for rest during work shifts.

Nearly every industry has a set of workers engaged, either directly (basis Industrial Employment Standing Orders Act, or through agencies under the Contract Labour Act) governed by fixed-term contracts. In cases where such contracts are covered by ESIC, the benefits to women are comprehensive and relatively fair.

The serious flaw in a fixed-term contract system is in the nature of its fixed-ness. An FTC is usually valid for a period of 12 months, which is in direct conflict with the leave available under the Maternity Benefits Act at 26 weeks or 6-½ month. Therefore, any duration of maternity leave will either subsume over half a tenure of an engagement or overshoot the tenure if the maternity period occurs on the verge of the tenure's end!

This seriously impacts welfare benefits, especially under ESI because the scheme calls for active payroll of the woman. Such practice is neither legal nor ethical and in many instances, several High Courts have directed reinstatement of employment or application of maternity benefits, as in the case of National Highways Authority of India vs National Commission for Women, among other cases.

The Maternity Benefits Act, by an amendment effected in 2017 (w.e.f. April 1, 2017), has also mandated providing creche facilities by every establishment, having 50 or more employees. While the Ministry of Labour and Employment issued a notification on 17th November 2017 advising the state governments to frame rules regarding crèche facilities, only, two states have notified relevant rules viz. Karnataka, and Haryana, while Tamil Nadu has only recently issued draft rules for comments and review.

While there have been numerous representations to the ministry by employers fora, chambers and industry, thus far nothing seems to have moved. Even if there are prospective developments of rules or regulation, making implementation feasible seems rather difficult.

Making Things Better

🡒 Every fixed-term contract or consultancy agreement or any similar type of assignment, for women, needs to have a standard clause, stating that the contract is deemed to have been extended and valid, wherever the woman employee has availed leave under the Maternity Benefits Act/ESIC till the date of expiry of such leave.

🡒 Whenever a woman employee applies for an extended leave basis medical proof as permissible under the MB Act/ESIC, extend the tenure of the contract suitably and automatically.

🡒 Ensure that every woman employed or deployed at an on-site facility is either directly or indirectly are aware of the benefits and avails of it in due course, if and when she so chooses.

🡒 Ensure that every pregnant woman who continues to work at an on-site facility during pre-maternity leave is provided with basic facilities such as an area to sit and rest.

🡒 Initiate an assessment of the actual need of a creche by employees or wherever the infrastructure permits, engage with reputed creche agencies.

🡒 Consider a fair creche allowance to employees.

Ungender Insights is the product of our learning from advisory work at Ungender. Our team specializes in advising workplaces on workplace diversity and inclusion. Write to us at contact@ungender.in to understand how we can partner with your organization to build a more inclusive workplace.

The author and Ungender Legal Advisory are joint owners of copyright of the article, in case of third-party authors. If the article has been authored by the Ungender Team then the copyright lies with Ungender solely. Any reproduction of these articles shall be in accordance with the provisions of the Copyright Act, 1957 only.

Also Read: POSH Judgements From Aug 2020: Focus On ICC's Powers, Concept Of 'Workplace'

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Vasudevan V

Vasudevan V


Vasudevan has a rich experience in legal and corporate governance over 35+ years experience in FMCG and Retail Industry. currently he is the General Counsel(Consultant) for Smollan-HUL JV and the Head – Retail Vertical for Ungender.

Abhishek M

Abhishek M

Creative Supervisor

" An engineer by profession, Abhishek is the creative producer of the team, graphic designing is his passion and travelling his get away. In more ways than one, he makes the content visually appealing."

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