This article is written by Swasti Jain from UPES, Dehradun. The article is edited by Khushi Sharma (Trainee Associate, Blog iPleaders).
Table of Contents
Labour law falls in the concurrent list of the Indian Constitution. It implies that both the center as well as the state can legislate for regulating the labour mechanism. The central government has stated that there are over 100 state and 40 central laws regulating various aspects of labour such as resolution of industrial disputes, working conditions, social security and wages. These existing legislation were complex to be referred and archaic in its basic sense. So to ease the compliance altogether, the Second National Commission on Labour (2002) recommended consolidating the Labour Laws. The recommendation were in relation to consolidation of laws into several groups such as Industrial Relations, Social Security, safety and welfare and working conditions.
Significant changes were brought by the Ministry of Labour and Employment and one of Code named Code on Social Security, 2020 came. The present code has been passed by both the houses and has also received president’s assent on September 28, 2020. But the code has not been enacted till date and the date is yet to be notified in the Official Gazette of India. The code subsumed several laws as follows:
- The Employees’ Compensation Act, 1923;
- The Employees’ State Insurance Act, 1948;
- The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;
- The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959;
- The Maternity Benefit Act, 1961;
- The Payment of Gratuity Act, 1972;
- The Cine- Workers Welfare Fund Act, 1981;
- The Building and Other Construction Workers Welfare Cess Act, 1996; and
- The Unorganized Workers’ Social Security Act, 2008.
Basic analysis of the new code
The social security code assimilates and introduces some new concepts within and also retains some archaic provision that further needs to be looked upon. The code is trying to achieve its goals by providing various definitions of workers in order to cover and fix them in various situations. It sets forth the dynamic changes in the relationship between an employer and an employee. The code has further included and defined the idea of Gig-worker, platform worker, building worker, Contract worker and so on. The definitions have been revised by keeping the realities in mind. The primary aim of the social security code, 2020 is to consolidate the abovementioned laws in order to bring ease in compliance relating to headcount thresholds, manner of computation of provident fund (PF) contributions, payment of gratuity, maternity leave entitlements, obligations for hiring inter-state migrant and building and construction workers, compensation events for work injuries, etc.. However, the present merely keeps the laws together in a place by retaining the earlier framework in separate chapters for each legislation. The code continues with the working of the same forums for regulation and administration, the better would have been by streamlining the organization without the fragmented set-up. Chapter VI of the Social Security Code deals with maternity benefits which the present article will discuss further.
Maternity benefits provision : need and history
The underlying purpose of maternity benefit within the code is to protect and preserve the respect of motherliness and most important the health of the women as well as the safety and healthy upbringing of the child. Appropriate measures for the protection of health and wages of women workers during the maternity period are of great significance for women as well as society. The woman is not able to perform her duty due to the health conditions which she faces on those days so for that purpose maternity benefits have been provided which ensure the proper health and dignity of motherhood.
For the first time, legislation related to maternity benefits was first enacted in the year 1929 by the government of the State of Bombay. The legislation was regarded as very progressive and by analyzing the results many states implemented their laws as well. Soon after Central legislations were passed adding provisions related to maternity benefits like Mines Act, 1941, Plantation Act, 1951. However, the scope of the act was not in direct relation with the benefits. With a view to providing separate maternity protection and benefits, the government of India enacted separate legislation named Maternity Benefits Act, 1961. With the changing times, an amendment was brought in the year 2017 to the same act which directly increased the benefits to women workers. The benefits were broadened to include adoptive as well as commissioning mothers. The benefits also included WFH, crèche facility etc. After the labour commission reported to ease the compliance, Maternity Benefit Act, 1961 was repealed by the Social Security Code, 2020. The code has also brought a few changes.
The chapter to the code applies to every establishment including factory, mine, plantation which is provided in the First Schedule of the code. The applicability is in a limited scope which only falls in which ten or more employees are employed or were employed on any day of the preceding 12 months. The provision further states that such other shops or establishments can also be included upon notification by the appropriate government.
Analysis of the changes in maternity benefits under the new code
The new code has brought up a new authority of Inspector-cum-facilitator under Section 14. The powers of the Inspector-cum-Facilitator under the Code of Social Security are similar to those of the Inspector of the Maternity Benefit Act, 1961 – they may, at any reasonable time, enter any establishment where women are employed or work is given to them, examine and speak to any person who they reasonably think is an employee, and require the employer to give information regarding the names and addresses of women employed, and payments made to them.
The Inspector cum-Facilitator also has the power to inquire into complaints of non-compliance of the provisions and pass orders that they deem just and proper based on the circumstances of the complaint. The present step does not necessarily makes so much difference to the present code. It is merely limited to changing the nomenclature. There could have been additional powers allotted to him that would additionally ease the entitled women to secure their rights.
Another change brought by the code is under Section 142. The provision states that any worker under the unorganized sector seeking to get maternity benefits under the security Code has to establish the person’s identity and the identity of the person nominated to receive maternity benefits in the event of her death through an Aadhar number. This is a new change that did not exist in the earlier maternity benefit Act, 1961. The code has to be balanced from both ends. On one hand, if the code is increasing the benefits and making it stricter upon the employees to follow the provisions then on the other hand there is definitely a need for checks and balances by maintaining the phenomenon of checking the true identity. This change is followed by the authorities may bring transparency and prevent misuse.
Another notable change has been brought to the concept of punishments. The new code has enhanced the punishments applicable in the cases when an employer is in contravention with the provisions of the code in matters relating to maternity benefits. Under Section 133 of the Code, any person who as an employer fails to provide maternity benefit to which a woman is entitled to under the code will find themselves punished with imprisonment for a term which may extend to six months or with a fine which may extend to INR 50,000, or with both.
The above-mentioned criterion is in contrast to the Maternity Benefit Act, 1961, which stipulated imprisonment of no less than three months but which could extend to one year, and with a fine of no less than INR 2000 but which could extend to INR 5000. In the event such a person repeats the offence of not providing maternity benefits to a woman who is entitled to it under the code, they will be punishable with imprisonment for a term which may extend to three years but which shall not be less than two years and shall also be liable to fine of INR 3,00,000. This is far more stringent compared to the Maternity Benefit Act, 1961 which, in the case of repeated offences, stipulated punishment with imprisonment which could extend to one year, or with a fine which could extend to INR 5000, or with both.
It is notable that when any company commits the offence of not providing maternity benefits to a woman is entitled to get, then the code mentions that every person who at the time, when the offence was committed was directly in charge or was responsible for the to conduct its business affairs as well as the company will compulsorily be guilty of the offence and will be punished accordingly. Further, the code also mentions about the company that if it is proved at the time of the offence that it was committed due to any neglect or with the consent of any officer i.e. these officers can be director, secretary or any other officer, then these officers shall also be held liable and will be punished accordingly.
The mere exception to the liability of such director, secretary or any other officer is that it is proved by them that the offence was committed without their knowledge or that they exercised due diligence to prevent such commission of the offence which has been so committed then no action will be taken against them. The changes here can be said to be good in the sense that now the provisions will be followed by the employers in a stricter sense. The increase in the penalty provision definitely creates a bit of sincerity to follow and be in compliance with the provisions and to allow all kinds of maternity benefits to the entitled woman.
The prior opportunity before prosecution
The inspector cum facilitator before initiation of prosecution proceeding which is against the employer for not providing maternity benefit to a woman who is entitled to under the code will be compulsorily given an opportunity to be in compliance with the relevant provisions by the way of written direction shall put down a time frame for such compliance and if the employer complies with such direction within such period then no such proceeding will be initiated against such employer.
However, the strict provision is that no such opportunity as mentioned above will be provided to the employer if it is found that such violation of not providing maternity benefits to the entitled woman is repeated within a period of three years from which the first violation was committed. In these cases, the prosecution shall be started in compliance with the provision of chapter XII of the code on social security, 2020.
Trade Union Office bearers can’t file a complaint in Court
A new change has been brought with respect to filling complaints. In the earlier legislation, Maternity Benefit Act, 1961 Section 23 allowed any office bearer of trade union registered under Trade Union Act, 1926 of which an aggrieved woman is a member or a voluntary organization registered under Societies Registration Act, 1860 to file a complaint regarding the commission of an offence under this Act in any court of this competent jurisdiction.
In the present code of 2020, no such office bearers and voluntary organisations can do so. Under Section 136 of the code, the present power is only provided to the aggrieved woman and the Inspector cum-facilitator to approach a court of competent jurisdiction to take cognizance of the offence which has been committed. This change brought by the code in leading to a more archaic sense. There can be numerous circumstances when the woman itself cannot approach to seek justice due to several reasons. There still needs a revision on the part of the legislature to further analyses by keeping every possible situation in mind.
While the Social Security Code aims to recognize the informal sector and bridge the existing disparity between employers and workers in the formal and informal sector, this article highlights how the framework has brought changes to the Maternity Benefit which is provided under Chapter VI of the Code. As far as the analysis of the code is concerned the new misses into certain aspects to address that are major ensuring the efficacy of the provisions of the code. One of the major setback while specifically focusing on the maternity benefits is the applicability part which is only applicable to 10 or more workers working in the establishment. The code is ignorant on the part of covering unorganized sector as a whole, their social security is most importantly hampered. These key reforms require robust discussion a debate to ensure that all possible concerns will be addressed for the security within the labour market.
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