Navigating Maternity Leave Payback: Is It Fair for Companies to Demand Repayment?

Dear All,

Please clarify the following case:

Employee has availed the benefit of maternity leave from ESI, and at the same time, the company has paid the salary for 12 weeks, i.e., she has received both maternity leave benefits from the company and ESI. She is not aware of the procedures for this and availed these benefits following basic procedures. After completing maternity leave, she was unable to return to work for a month and decided to resign from the job due to post-maternity health problems. She submitted her resignation letter and explained the situation. However, the company has insisted that she must repay the 3 months' salary before being released, or else legal action will be taken against her.

1) Is it legally correct for the company to require repayment of the 3 months' salary when they have already paid for 12 weeks? How was the company able to pay the salary for 12 weeks?

2) Is it mandatory for the employee to repay the 3 months' salary to be relieved of her duties?

3) If the company issues threats like this, what legal actions can be taken?

4) What does the ESI Act stipulate in such cases?

Please clarify the above issues and provide advice on the right course of action in this case.

Your prompt advice on this matter would be greatly appreciated for further proceedings.

Dear Dhananjay,

First of all, Maternity Benefit is sponsored by ESI. ESI pays the amount, so there is no sense in the employer paying for it. Now, the employee wants to resign. You can only force her to repay the amount or recover that money in her full and final settlement. The mistake was made by the employer.

Regards,
Vipin

Dear Dhananjay,

As Vipin mentioned, it was a mistake on the employer's side, so they cannot legally file any case against her.

Regards,
Sara

Hi Dhananjay,

Firstly, female employees will receive maternity benefits in two ways. The first is for those who are registered under ESIC, as they will receive benefits from ESIC. The second group includes those not covered under ESIC (whose salary exceeds 10,000/- P.M.), and they will be considered under the separate Maternity Benefit Act of 1961. According to this act, employers should pay 90 days' salary to the particular employee. If the employee is registered under ESIC, the employer is not required to pay her salary.

As you mentioned, your organization has already paid her salary, and she is unaware of the process. However, as the employer, you should be familiar with the process. This mistake lies entirely with the employer, and based on this, they cannot claim any amount back from her. For further details, please refer to the ESIC act and the Maternity Benefit Act of 1961.

Regards,

Hi,

As per the ESI Act, Maternity Benefit will be paid by the ESI Corporation and not by the employer. It is your mistake. So, don't force the employee to repay the amount.

MANOKAVIN

Mr. Dhanuindian,

Case: The female employee has availed maternity benefit from ESI, and the employer has also provided that benefit for 12 weeks. After that, she has not joined the company and resigned.

Solution:
1- Check the mode of payment to her by cash, bank transfer, or cheque.
2- In what head the payment has been booked in your accounts books.
3- If the given amount is paid in the salary account and there is no mention of "maternity benefits" in your books, then you can recover that amount from her full and final settlement as "excess paid for the period ...!!"

Thanks,
Rajeev Kumar Saxena
9818111867

Originally Posted by Dhanuindian
Dear All,

Please clarify the following case:

Case as below:
An employee has availed the benefit of maternity leave from ESI, and at the same time, the company has paid the salary for 12 weeks. She has received both maternity leave benefits from the company and ESI. She is not aware of all the procedures and availed these benefits based on basic procedures. After completing maternity leave, she was unable to return to work for a month and wanted to resign due to some post-maternity health problems. She submitted the resignation letter and explained the problem. However, the company claimed that she had availed both benefits and demanded repayment of the 3 months' salary to be relieved, threatening legal action if not complied with.

1) Is it legally correct? If yes, how was the company able to pay the salary for 12 weeks?
2) Is it mandatory for her to repay the 3 months' salary to be relieved?
3) If the company issues such threats, what legal actions can be taken?
4) What does the ESI Act state?

Please clarify the above issues and advise on the right course of action in this case.

Your prompt advice is highly appreciated for further proceedings.

Dear Dhananjay,

In this case, you are required to issue a notice to the concerned female employee for the recovery of the amount paid to her in ignorance by you or for the amount taken by her in violation of the law as she was not entitled to this amount due to the coverage of ESI. After hearing from the employee, adjust this amount from her full and final payment by making a speaking order.

Regards,
R.N. Khola
Senior Associate
Skylark Associates, Gurgaon
09810405361