Issue

Context

• Recently, a survey was conducted to study the effects of amendment to the Maternity Benefit Act on women’s employment and on representation of female workforce in India.

Background

• When the provisions of the amendment to the Maternity Benefit Act came into force, it was lauded as a progressive step towards improvement in securing the employment rights of women.
• However, there are now significant job losses for women in India in the short to medium term.
• India offers one of the world’s most generous maternity leave policies. But India is also probably the only country where the entire financial burden of the maternity leave is supposed to be borne by the employer.
• In most countries, the cost of maternity leave is shared across the government, employer, insurance and other social security programmes (Singapore—eight weeks employer and eight weeks public funds; Australia and Canada—100% public funds; France—social insurance scheme; Brazil—mixed contribution from the employer, employee and government).

About

Maternity Benefit (Amendment) Act, 2017

• The Maternity Benefit Act 1961 protects the employment of women during the time of her maternity and entitles her of a ‘maternity benefit’ – i.e. full paid absence from work – to take care for her child. The act is applicable to all establishments employing 10 or more.
• As per the Act, to be eligible for maternity benefit, a woman must have been working as an employee in an establishment for a period of at least 80 days in the past 12 months. Payment during the leave period is based on the average daily wage for the period of actual absence.

Maternity Benefit (Amendment) Act came into effect from April 1, 2017.

Analysis

Key Amendments

• Increased paid maternity leave: The duration of paid maternity leave available for women employees has been increased from the existing 12 weeks to 26 weeks. Under the Act, this benefit could be availed by women for a period extending up to a maximum of 8 weeks before the expected delivery date and the remaining time can be availed post childbirth. For women who are expecting after having 2 children, the duration of paid maternity leave shall be 12 weeks (i.e., 6 weeks pre and 6 weeks post expected date of delivery).
• Maternity leave for adoptive and commissioning mothers: Maternity leave of 12 weeks to be available to mothers adopting a child below the age of three months from the date of adoption as well as to the “commissioning mothers”. The commissioning mother has been defined as biological mother who uses her egg to create an embryo planted in any other woman.
• Work from Home option: The Amendment Act has also introduced an enabling provision relating to "work from home" for women, which may be exercised after the expiry of the 26 weeks' leave period. Depending upon the nature of work, women employees may be able to avail this benefit on terms that are mutually agreed with the employer.
• Crèche facility: The Amendment Act makes crèche facility mandatory for every establishment employing 50 or more employees. Women employees would be permitted to visit the crèche 4 times during the day (including rest intervals).
• The Maternity Benefit Amendment Act makes it mandatory for employers to educate women about the maternity benefits available to them at the time of their appointment.

Criticism of the Act

• It is argued that it promote patriarchy as almost whole responsibility of child caring is on the mother's as per this amendment. Government has not announced any leave for fathers.
• Many private firms have registered dip in women hiring over maternity leave.
• The law is expected to benefit only a small percentage of women who are working in organised sector ignoring the majority who work in the unorganised sectors like farmers, contract labourers etc.

Recent reforms introduced by the Government

• The Women and Child Development Ministry has recently announced that the government will refund employers salaries for seven of the 26 weeks of maternity leave for women earning more than 15,000 rupees a month.
• The Government has been decided to utilise the funds lying in the labour welfare cess to pay the employers in this regards. However, the utilisation of the cess lying with the state governments has been very less.
• Recently, the Centre has prepared guidelines for setting up of crèches at workplaces, which prescribe trained personnel to man the facility as well as infrastructure requirements and safety norms.
  
  

  Central guidelines for crèches at workplaces A crèche has to be either at the workplace or within 500 metres of it. Alternatively, it could also be in the beneficiaries’ neighbourhood. The facility should be open for eight to 10 hours and if the employees have a shift system, then the crèche should also be run accordingly. A crèche must have a minimum space of 10 to 12 square feet per child to ensure that she or he can play, rest and learn. There should be no unsafe places such as open drains, pits, garbage bins near the centre. The crèches should have at least one guard, who should have undergone police verification. There should also be at least one supervisor per crèche and a trained worker for every 10 children under three years of age or for every 20 children above the age of three, along with a helper. No outsiders such as plumbers, drivers, and electricians be allowed inside the crèche when children are present. A crèche monitoring committee with representations from among crèche workers, parents and administration should be formed. There should also be a grievance redressal committee for inquiring into instances of sexual abuse. The guidelines are not mandatory but are a yardstick for NGOs and organisations for setting up of creches.

  Drawbacks in the Ministry of Labour Proposal

  On 12 September 2018, the Ministry of labour and employment proposed changes that have several drawbacks:

• Wages equivalent to only seven weeks shall be reimbursed by the government of India to employers who employ female workers and provide maternity benefits of 26 weeks’ paid leave.
• To enable an entity to avail the incentive, the female employees working in the entity concerned should be earning wages less than ?15,000. The Employees’ State Insurance (ESIC) Act mandates that all employees earning wages of ?21,000 or less shall be covered under the Act. But the proposal to consider employees earning wages of ?15,000 or less, with the conditions attached to it, does not seem justifiable. This is owing to the fact that the women earning wages of ?21,000 or less but are employed in non-implemented areas are not entitled to the benefits and the employer is forced to bear the entire cost.
• Large number of female employees, especially in information technology, information technology-enabled services, pharmaceutical, logistics, banking, financial services and insurance, and service sectors, are paid wages of ?15,000 or ?21,000 or higher per month.
• Another drawback is that the female worker has to be a member of Employees’ Provident Fund Organization (EPFO) for at least one year and must not be covered under ESIC. The conditions set forth above lack logic or reasoning considering a) entitlement to maternity benefits kicks in once an employee completes 80 days (less than three months) of continuous service, and b) an employee is entitled to the benefits under the proposed incentive only if she has been a contributing member of EPFO for at least a year and is not covered under ESIC.
• The added provisions such as crèches with certain prerequisites (caretakers, visits by mothers, suitable location) that are mandatory for commissioning mothers lack clarity.
• Last, the Maternity Benefit Act, 1961, as amended from time to time, is state government legislation, implying thereby that state governments may amend the Act from time to time to extend benefits higher and incremental to the benefits recommended by the central government.

Way Forward

• Raising Women’s labour force participation is necessary to remove poverty from India.
• A few remedial measures include cost sharing between employer and government by way of reimbursement once the employer furnishes the proof of payment of maternity leave wage, slab-based tax rebates offered by the government on actual maternity wages paid, setting up a government insurance scheme to pay for maternity wages, and leave sharing in the form of 13 months maternity and 13 months paternity to negate any possibility of gender bias.
• The seven weeks reimbursement limit must be extended to a minimum of 13 weeks.
• The period of wages of 13 weeks could also stand to be extended to all female employees who are not covered under ESIC, without any preconditions on wage ceiling or membership of the provident fund organization for one year, etc.
• Further, the government must set up crèches with all the attendant facilities proposed in the Maternity Benefit (Amendment) Act, 2017, and allow employees eligible for such benefits to use these crèches at a very nominal cost.
• Bringing the Maternity Benefit Act under central legislation will also help maintain uniformity.
• Such changes in the Act will likely encourage employers to provide employment opportunities to women without any gender discrimination and thus bring women into the mainstream of India’s progress. Hiring and employee retention will improve as well.
• With such active steps, there’s a hope of raising India’s overall female labour force participation from the present 26% to a competitive level like China’s 60%.

Learning Aid

Practice Question:

Ineffective and shoddy legislation remains the main reason behind India’s persistently low female labour force participation rate. Discuss critically.