Maternity Benefits and Creche Facilities For Contractual Labour

Written By: Vasudevan V

Note from the Editor: ‘Explainers’ are a new series at Ungender Insights. A question to consider with regard to the maternity benefits 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 many state governments in India were contemplating amendments to the labour law, which according to experts, disproportionately intended to negatively impact women contract labour. Among other proposed amendments, sweeping changes to the Maternity Benefit 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.

Data from Census 2011 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 great overview on labour law and women, see: https://www.epw.in/system/files/pdf/2020_55/20/SA_LV_20_100529_RWS_Indrani_Mazumdar.pdf 

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 covers all women who are employed on contractual, casual, fixed term, including consultants. 

Here is what the law provides:

🡒 At an average daily wage of 3 months before the date of leave amounting to 26 weeks, of which not more than 8 weeks to be before delivery of the child OR if the woman has two or more than two surviving children then 12 weeks, of which, more than 6 weeks is has to be before delivery of the child.

🡒 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 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 Rs. 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 v. 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;

In consonance with the Directive Principles of State Policy as set out in Article 39 and in other Articles, specially, Article 42 of the Constitution of India. It further held that a 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 to often, women on contract, or engaged 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, mid –way 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  6½ month.  Therefore, any duration of maternity leave will either subsume over half a tenure of 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. 1.4.2017), 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, 2 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 for a chambers and industry, so 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 any 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 any 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 any 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.

About the Author: 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.

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.