Are Contractual Workers Entitled to Benefits under The Maternity Benefit Act?

This article is written by Pratha Waghmare, BBA. LLB. (HONS.) from University of Mumbai Law academy, Maharastra and curated by Rajrishi Ramaswamy from Symbiosis Law School, Hyderabad.

The question in the title can be safely classified as one of the most pressing concerns among women working through an agency or contract. However, Section 2 (o) of the 1961 Maternity Benefits Act evidently eliminates apprehension, since it defines “woman” as employed women, directly or through any agency, for wages in any establishment.

Therefore, the definition of woman under the law extends the benefits to all female workers, including those hired through an agency or contract.

Following the recent amendment to the Maternity Benefits Act, i.e. the Maternity Benefits  (Amendment) Act, 2016, stakeholders had raised several questions and one of them was whether the amending law that extended the Maternity Benefit to a 26-week period was applicable to employees or contract consultants. 

Subsequently, the Ministry of Labor and Employment issued a clarification on April 12, 2017, in which it was stated that, since there were no changes to Section 2 (o) of the 1961 Act, it was applicable to all women who work in any capacity, directly or through any agency, or contract or consultancy work.

Another question that is often asked is whether maternity allowance law applies to women workers in the private sector.

The answer is yes. The Act is also applicable to employees of the private sector, since the statute does not distinguish between a public or private entities and also since it establishes that “the Act is applicable to:

Each establishment which is a factory, mine or plantation, including any government-owned establishment and any establishment where people are employed to exhibit equestrian, acrobatic and other shows;

Each shop or establishment within the meaning of any law currently in force in relation to shops and establishments in a state, where ten or more people are employed or have been hired, on any day in the previous twelve months.”

What is the eligibility for applying for maternity allowance?

Section 5 (2) of the Act clearly states that a woman is entitled to maternity allowance if she has actually worked under an employer at an establishment, for a period of not less than 80 days in the twelve months immediately preceding the date of her expected delivery.

Case  Laws:

Delhi Municipal Corporation vs. The workers (Muster Roll) and Another: The Apex Court held that the provisions of the Maternity Benefits Act, also authorize maternity leave to women who work occasionally or on the basis of daily wages and not only those who work regularly. The provisions of the Acton the matter, are fully in line with the Directive Principles of State Policy contained in Articles 39, 42 and 43.

The Central Administrative Court (CAT) in a recent case of Anuradha Arya v. The Principal & Ors. categorically stated that paid maternity leave benefits cannot be denied to a designated employee and that they are entitled to maternity leave as provided under Section 5 of the Maternity Benefits Act, 1961. While issuing this order, CAT has relied on the Supreme Court ruling in the Delhi Municipal Corporation case.

The CAT in the above case also observed that the nature of “maternity benefit” requested by the applicant in the present case, cannot be systematically affected or equated to any “other benefit” claimed by an ad-hoc employee. Granting maternity leave to an ad-hoc or regular employee should be treated differently.

The High Court of Kerala in Rakhi P.V. & Ors. v. Kerala State and Anr. held that hired employees are also entitled to 180-day maternity leave. In this case, the petitioners made an application for maternity leave during the period of their employment and were denied a 180-day maternity leave, as indicated in the Maternity Allowance Act (amendment), 2016. The petitioner has argued that under the provisions of the Kerala Service Rules (KSR), as well as the provisions of the 1961 Maternity Benefits Act, every employee who works in any establishment is entitled to 180-day maternity leave.

The main complaint of the state in denying signatories 26-week/180-day maternity leave was that female workers working on a contract on state-funded projects were entitled to 90-day maternity leave.

The Court also made the following observations:

That the signatories are also female employees who work on contractual basis for state-funded projects. The benefits of improved maternity leave for women workers are undoubtedly part of the social care legislation aimed at guaranteeing women equal opportunities in public employment; therefore, the State’s claim that employees hired under projects are entitled to a 90-day maternity leave period cannot be tolerated, as it would discriminate against women workers who do not participate in capacity-building projects on a contractual basis.

That the inalienable obligations of motherhood should not and cannot be a reason for denying equal opportunities to female workers. This would be precisely the result of the limitation of maternity leave to female workers, regardless of the nature of their employment.

That the state’s claim that the contractual appointment of signatories lasts only one year and that the granting of six-months of paid leave would also eliminate the benefit of the compromised project is not sustainable because the signatories are people who continue to serve the base for the subsequent extension of the contract.

Therefore, from the above laws and court ruling, it is very clear that the Maternity Benefits Act is applicable to contract employees and does not discriminate between people who work on a contract and regular job.

.