India: Notification Of The Maternity Benefit (Amendment) Act, 2017: The Key Impacts

Last Updated: 19 April 2017
Article by Raunak Singh

INTRODUCTION

On account of certain distinctive qualities bestowed upon women by nature, the law makers across the globe have been witnessed to implement certain special protections and benefits to the female section of the workforce. Further, the legislative bodies from time to time have attempted to redesign the said protections and benefits in order to keep a pace with the growing female population in the global workforce. The Maternity Benefit (Amendment) Act, 2017 ("MB Amendment Act") which came into force on April 01, 2017, amending some of the key benefits mandated under the Maternity Benefit Act, 1961 ("MB Act") may qualify as one of such attempts. The MB Amendment Act has extended the earlier available maternity leave period of 12 weeks to 26 weeks, thereby exceeding the international standard of 14 weeks' maternity leave as recommended by the International Labour Organization.

Besides outlining the key aspects of the MB Amendment Act, this article makes an attempt to analyze the anticipated impacts which our society may be subjected to on account of the said amendments.

AMENDMENTS CARRIED OUT TO THE MB ACT

  • Duration of paid maternity leave [Section 5(3)]: This is one of the most significant piece of amendment, whereby the existing maternity leave period of 12 weeks (of which not more than 6 weeks should have preceded the expected date of delivery) has been extended to 26 weeks (of which not more than 8 weeks shall precede the expected date of delivery). However, the paid maternity leave applicable to female employees with two or more surviving children has been restricted to 12 weeks (of which not more than 6 weeks shall precede the expected date of delivery).
  • Commissioning Mothers/ Adopting Mothers [Section 5 (4)]: The MB Amendment Act has extended the benefit of maternity leave (for a period of 12 weeks) to (a) the female employees who legally adopt a child below the age of three months and (b) commissioning mothers. The term 'commissioning mother' has been defined to mean a biological mother who uses her egg to create an embryo implanted in any other woman.
  • Work from home [Section 5 (5)]: The MB Amendment Act has given recognition to the concept of 'work from home'. Accordingly, post maternity leave, if the nature of the work permits, the employer may allow its female employees to work from home. The terms and conditions for such work from home are to be decided mutually by the employer and the female employee so concerned. However, the said provision has not been enforced yet and shall come into force on July 01, 2017.
  • Creche Facility [Section 11A (1)]: The MB Amendment Act requires every establishment with 50 or more employees to have a creche facility within the prescribed distance for their employees. Also, the employer is required to permit the female employee so concerned to visit four times a day to the creche.
  • Details of Benefits [11A (2)]: The MB Amendment Act makes it compulsory for every establishment to intimate its female employees of all the benefits available under the MB Act at the time of their initial appointment. Moreover, the details of the benefits available under the MB Act shall be given in writing and electronically to the female employees.

BROAD ANALYSIS OF KEY CHANGES

Time and again expert bodies and international organizations have recommended for minimum 24 weeks of maternity leave to protect the maternal and child health. Thus, the benefits extended to female employees by way of the MB Amendment Act may said to be a step forward towards women empowerment. However, a close analysis of the said changes, as discussed below, may suggest that the same may not qualify as a very balanced approach from the law makers.

  • Additional cost for the employer: The extension of maternity leaves, as introduced and mandated by the MB Act shall certainly act as a direct cost to the employers. Additionally, the requirement of creche facility shall further surge the cost borne by the employers. Therefore, it will not be out of place to conclude that the government has conveniently extended and added the said benefits solely at the cost of the employers. Unlike the aforesaid, in many countries where paid maternity leaves are granted for such long durations, it is not only the employer who is burdened with the entire cost of such benefits. Rather, the government of these countries have adopted different mechanisms with an objective that the employer alone is not subjected to the entire financial burden. For instance, where in some countries cash benefits are paid to the pregnant women through national social security benefits, in others, the government shares the burden with the employer.
  • Decline in female population from the workforce: One of the biggest threat that the MB Amendment Act poses could be a reluctant approach of employers to hire female employees due to enhanced cost burden over the employer. The said job threats for the female section of employees may have an adverse impact on the society at large, thereby resulting into a decline in the overall female population in the workforce.
  • Ease of doing business: India has been struggling to qualify as an investor friendly destination for foreign investments. Recently, India was ranked at 130th position out of 190 countries in the World Bank's 'ease of doing business' ranking for 2017. Such initiatives adding to the cost of business may not be helpful for the economy from the investment perspective.
  • Work from home: The language of the statutory provision allowing 'work from home' to female employees does not seem to have a binding effect on the employers. In the absence of this provision also, employers were very much entitled to allow their employees to work from home. Therefore, the said provision doesn't seem to add much to the list of benefits for female employees.
  • Non-applicability to unorganized sector: The applicability of MB Act is limited to establishments with 10 or more employees besides other notified establishments, thus keeping the majority of the workforce i.e. woman of unorganized sectors, outside the ambit of the said enactment. In spite of the Law Commission of India, recommending to bring the working females of unorganized sectors within the ambit of the MB Act, the same has not been taken into consideration under the MB Amendment Act.
  • Non-recognition of paternity benefits: The MB Amendment Act is silent with respect to paternity benefit, contrary to the suggestions made by the International Law Commission, so as to end the stereotype thinking that upbringing a child is only female's job. No benefits have been extended on paternity grounds in order to aggravate the gender gap.

CONCLUSION

The MB Amendment Act seems to be a welcome step, as on one hand it encourages female employees to be absorbed in the workforce and on the other hand it incentivizing those already working. It further tries to introduce uniformity in the maternity benefits by providing at par maternity benefits to the employees in private sectors as compared to those working in the government sector.

However, the same is receiving mixed reactions from the different sectors of the society on the grounds discussed above. This surely indicates that interests of all the stakeholders have not been taken into consideration while carrying out the said changes. To conclude, designing of the MB Amendment Act lacks an innovative and thoughtful approach in terms of government's socio and economic objectives.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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