India: Extension Of Maternity Benefits Beyond The Employment Period

In a recent landmark judgement, the Hon'ble Supreme Court of India gave a progressive judgement by allowing maternity benefits entitlement to an eligible employee for the period which overshoots the contractual period of her employment. The Maternity Benefit Act, 1961 ("Act") safeguards working women's right to employment with wages during the time of their maternity and prescribes a leave period of 26 (twenty-six) weeks to those female employees who have worked for a period of at least 80 (eighty) days in the 12 (twelve) months immediately preceding the date of her expected delivery, which can be availed up to two (2) children.¹ While the Act specifies the pre-requisites for entitlement of maternity benefits, such entitlement beyond the period of her agreed tenure under the employment contract has been controversial and generally denied by employers. This rejection of benefits by employers is set to change owing to the recent three-judge bench judgement of the Hon'ble Supreme Court of India in the case of Kavita Yadav vs. The Secretary, Ministry of Health and Family Welfare Department and Ors.² where the Apex Court delved into the broad intent behind the enactment of the Act and permitted maternity benefits to an eligible employee for the period beyond her contractual period of employment.

Factual Background

The appellant, Ms. Kavita Yadav was engaged as a senior resident (pathology) at a hospital in Delhi on contract basis, for a term of 1 (one) year (with effect from June 12, 2014), which could be extended twice i.e., until June 11, 2017. On May 24, 2017, the appellant applied for maternity leave starting from June 1, 2017. However, the respondent communicated to the appellant that as per the terms and conditions of the offer of appointment, her contract would come to an end on June 11, 2017, which could not be extended any further and accordingly, the appellant was entitled to only 11 (eleven) days of maternity benefits i.e., from June 1, 2017, to June 11, 2017. The appellant contested the decision of the respondent before the Central Administrative Tribunal, Principal Bench, New Delhi³ as well as the Delhi High Court⁴ but was unsuccessful in getting the maternity benefits beyond the expiry of her contract.

The Delhi High Court observed that in terms of the Act, every woman is entitled to the payment of maternity benefit at the rate of average daily wage for the period of her 'actual absence'. This period of 'actual absence' could only be construed as period during which the employee would be expected to remain present if she was not on maternity leave. However, where the contractual employment is time bound with an outer limit, and the same comes to an end during the period of pregnancy, or even after childbirth, there would be no question of the women employee remaining actually "absent" as she would not be expected to remain present post the termination of her contract period. Accordingly, the High Court was of the view that the appellant's claim for benefits beyond the contractual period would tantamount to unintended extension of the contract, which is not the purpose of the Act.

In an appeal by the appellant, the Supreme Court allowed the appeal stating that the High Court erred in law in holding that the appellant was not entitled to maternity benefits beyond June 11, 2017, and directed the respondent to extend maternity benefits to the appellant in terms of the Act.

Rationale for the Supreme Court Judgement

The Supreme Court taking note of the provisions of Section 12(2)(a) of the Act which states that, '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, shall not have the effect of depriving her of the maternity benefit or medical bonus...', opined that the continuing nature of maternity benefits is in-built in the statute where the benefits would survive and continue despite the cessation of employment. The Court noted that there is an embargo in terms of the Act on the employer from dismissing or discharging a woman who absents herself from work in accordance with the provisions of the Act during the period of such absence. In the opinion of the Court, the term 'discharge' is of a wide scope, and it would include 'discharge on conclusion of the contractual period'. The Court emphasized on the objective of the Act where every female employee is entitled to maternity benefits on fulfillment of the conditions specified therein, and such benefits can travel beyond the term of employment. Hence, the benefits are not co-terminus with employment tenure.

The Supreme Court referred to the judgment in Municipal Corporation of Delhi vs. Female Workers (Muster Roll) & Anr.⁵ which had extended the application of maternity benefits in case of daily wage workers (who cannot be said to have continuity of service for an unlimited period), and the Court noted that the effect of that judgment was to notionally extend the tenure of employment so far as the application of maternity benefits under the Act was concerned. The Supreme Court also relied on another case of Deepika Singh vs. Central Administrative Tribunal and Others⁶, which had referred to the Act for guidance in relation to maternity leave and recognized that a woman's absence from work owing to the delivery of her child does not hinder her entitlement to maternity benefits.

The Apex Court noted that the provisions of the Act do not lead to an interpretation that maternity benefits cannot survive or go beyond the duration of employment. The expression used in the Act is maternity benefits and not leave and the benefits are applicable for the entire period she would have been otherwise entitled to even in a case where the applicant woman dies after delivery of the child. Accordingly, the Supreme Court held that once the criteria for entitlement of maternity benefits, as specified in the Act is fulfilled, the appellant became eligible for the full maternity benefits even if such benefits exceeded the duration of her contract. If an employer attempts to enforce the contract duration during such period for benefits claimed by her, such action would constitute 'discharge' and attract the embargo against discharge under the Act.

Conclusion

The aforesaid ruling will have a longstanding impact on the rights of women to claim maternity benefits even if employers are keen to discharge women employees during such pregnancy by not extending the tenure of employment. Accordingly, going forward if a woman (including both contractual and daily wage workers) has worked in an establishment for at least 80 (eighty) days during the immediate twelve months preceding her date of delivery, she becomes eligible for the maternity benefits of 26 (twenty-six) weeks prescribed under the Act, even if such benefits extend for the period beyond the tenure of her employment. If the employer insists on the expiry of contract period to disentitle the full maternity benefits to an eligible employee, this would be construed as "discharge" within the purview of the Act thereby allowing maternity benefits to such discharged employee.

Footnotes

1. The leave benefits permitted for more than 2 (two) children is 12 (twelve) weeks of leave with wages.

2. (C.A. No. 005010/2023)

3. OA No. 1978/2018

4. W.P. (C) No. 8884/2019

5. (2000) 3 SCC 224

6. (2022) 7 SCR 557

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