In August 2023, in Dr. Kavita Yadav v. The Secretary, Ministry of Health and Family Welfare Department and Ors. (“Kavita Yadav Case”),[1] the Supreme Court of India (“Supreme Court”) overruled the High Court of Delhi’s (“Delhi HC”) decision from 2019 in the same case (“Kavita Yadav Delhi HC Decision”) to hold that fixed-term employees would be entitled to full maternity benefits under Section 5 of the Maternity Benefit Act, 1961 (“Maternity Benefit Act”), even after the expiry of their contractual term.
The Petitioner, was appointed as a senior resident at a hospital on June 12, 2014, where her appointment letter had specified that the posting was for a period of one year, extendable on a yearly basis up to a maximum of three years. During the last year of her contract extension, she applied for maternity benefits from June 1, 2017, in accordance with the Maternity Benefit Act. However, her employer informed her that she would be entitled to only 11 days of maternity benefits as her contract was due to expire on June 11, 2017, and the organisation’s rules did not allow/permit any further extension.
In 2019, the Delhi HC[2] denied the Petitioner maternity benefits beyond the term of her contract referencing Section 5(1) of the Maternity Benefit Act, which entitles women to maternity benefits at the rate of average daily wage “for the period of her actual absence…” and consequently presupposes that the woman would be “present” at work if not for the maternity leave. The Delhi HC therefore held that the right to maternity benefits would be subject to the terms of the contractual employment, including the length of the contract, and that the Maternity Benefit Act does not purport to extend the woman’s term of contract or period of service.
In the appeal against the Kavita Yadav Delhi HC Decision, the Supreme Court addressed the applicability of the Maternity Benefit Act to fixed-term contracts. The Apex Court observed that Section 12(2)(a) of the Maternity Benefit Act encapsulates the principle of continuation of maternity benefits despite cessation of employment in the statement: “The discharge or dismissal of a woman at any time during her pregnancy, if the woman but for such discharge or dismissal would have been entitled to maternity benefit or medical bonus referred to in Section 8, shall not have the effect of depriving her of the maternity benefit or medical bonus.” In this regard, the Supreme Court held that the term “discharge” in the statute is of wide import and would include discharge on the conclusion of the contractual period.
To explain that maternity benefits were not co-terminus with a woman’s tenure of employment, the Supreme Court referred to Section 5(3), which entitles a woman’s successors to the entirety of her eligible maternity benefits in case of her death during or after the delivery of her child. Moreover, the Supreme Court highlighted that the legislation’s use of the expression maternity benefit instead of maternity leave clarifies that it does not presuppose the continuation of employment for the entirety of 26 weeks. The Supreme Court also drew attention to the language used in this statement from Section 27 of the Maternity Benefit Act – “The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement or contract of service, whether made before or after the coming into force of this Act.”, and noted that as the semantic implication overrides any agreement or contract of service inconsistent with the Maternity Benefit Act, the employer could not use the fixed-term contract to restrict the petitioner’s entitlement to maternity benefits. The Supreme Court accordingly concluded that the Maternity Benefit Act creates a fiction of continued employment by treating the woman to be in employment solely to avail her maternity benefits entitlement.
The Supreme Court, to highlight the principle of notional extension of employment, referenced its earlier decision in Municipal Corporation of Delhi v. Female Workers (Muster Roll) & Another,[3] where it had held that the Maternity Benefit Act covers contract workers, including those employed on daily wages (“Muster Roll Case”). The decision in the Muster Roll Case had granted notional extension of employment even to daily-wage workers for the purposes of the Maternity Benefits Act even as daily-wage workers’ could not be said to have any guaranteed continuity of service for an unlimited period.
The Supreme Court’s judgment in the Kavita Yadav Case is significant as it clarifies the judicial interpretation of key provisions of the Maternity Benefit Act. The principles laid down in the Kavita Yadav Case were also relied on by the Delhi HC in its recent decision of Govt. of NCT Delhi v. Rehmat Fatima[4] to grant maternity benefits to a contract worker post the expiry of her contractual engagement. This also lays a beneficial foundation for improved maternity protections at the workplace, particularly for women engaged for work on non-standard contracts, such as fixed-term contracts (who may otherwise not be provided, or not be aware of, such maternity benefits for the full 26-week period). That said, employers should also acknowledge and be aware of the additional financial exposure that could result from this extension of maternity benefits beyond the expiry of a contractual term and the notional extension of employment after the expiry of the contract.
In certain other jurisdictions, such as Croatia, Italy, Luxembourg, and Tajikistan, legislative measures to grant maternity protections to women in temporary or contract employment require that employers continue paying the women maternity benefits for three (3) months after the expiry of their contract. Legislation in certain jurisdictions even obligates employers to assist such women with finding alternative employment.[5] General practice across jurisdictions seems to be absolute prohibition of maternity-related dismissal during an individual’s maternity leave. Therefore, it appears that the Supreme Court’s decision in the Kavita Yadav Case has now aligned maternity-related practices in India with global standards on the extension of maternity benefits to working women beyond their contractual tenure.
For further information, please contact:
Bishen Jeswant, Partner, Cyril Amarchand Mangaldas
bishen.jeswant@cyrilshroff.com
[1] 2023 SCC OnLine SC 1067.
[2] 2019 SCC OnLine Del 9776.
[3] (2000) 3 SCC 244.
[4] 2024 SCC OnLine Del 1749
[5] International Labour Organisation, ‘Maternity and Paternity at work: law and practice across the world’, 2014. Accessible at https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@publ/documents/publica
