Facing Maternity Leave Challenges: Does Company Policy Override Legal Rights?

My wife was working in an IT firm for the past year. While going on maternity leave, she was informed that she would be paid maternity benefits once she completed the 3 months of maternity leave. Her company didn't have any payslip, ESI, or EPF, even though they had more than 20 employees working there. However, upon completion of the leave, when she contacted them to join back, she was asked to resign as she wouldn't be able to extend working hours. They had promised to provide maternity benefits and asked her to submit the resignation once this was done. However, they have only included the basic pay for the 3 months, even though, correct me if I am wrong, the Maternity Benefit Act clearly states that the 3 months' payment includes basic + DA, HRA, medical allowance, and other allowances. Upon asking for clarification, she was told this is their company policy. She received an insulting message from the company head as an SMS through the phone for seeking clarification. Will maternity benefits depend on company policy or just the Maternity Benefit Act? The offer letter provided to her has no clause on maternity leave.

Maternity Leave Policy and Legal Compliance

A company can have a different Maternity Leave Policy, but it should not be inferior to that of the official Maternity Benefit Act. Therefore, denying maternity benefits or paying less than what is stipulated in the Act is not fair and also illegal.

Appointment orders need not mention general policies that are applied by statutory enactments. Therefore, even if the appointment order is silent about maternity benefits, the benefits should be given to eligible employees. It is more accurate to say that even if the appointment order clearly states that you will be paid only the basic salary for three months as maternity benefit, or you will be asked to resign from the job if you take maternity leave, the same will not be maintainable because contracting out is not permitted under labor laws. As such, you cannot have an agreement stating that the employee will not be paid maternity benefits, gratuity, bonus, etc.

If there is a denial of benefits, you can approach the Labor Officer and seek justice. You can also state that you were forced to resign, which will again be a charge against the company.

Regards,
Madhu.T.K

Thank you for the clarification, Madhu. I would like to confirm a few more things.

1. Is the pay full pay and not just basic pay? She was not provided any payslip, and the only documentary proof of salary is the bank account statement. Is it valid?

2. Maternity benefits do not require the employee to rejoin, correct?

3. Can I take legal action if the company provides a bad report along with her resignation, as they have requested her to resign?

4. Is an email from the company HR legally valid proof if I approach the legal officer?

5. Does the fact that the company is not registered under ESI or for EPF change any of the maternity benefits or payment amount?

Thanks for the prompt and helpful response.

Dear Mrugen.vyas, maternity leaves can only be availed after six months of the joining date. Are you certain this is valid? According to the Maternity Benefit Act 1961, the employee should have completed only 80 days, not six months.

Regards

Salary Slips and Legal Implications

Employers are expected to issue salary slips every month. If the company has not provided them, it is yet another charge against the company. The amount deposited in the bank may not represent the entire salary but only the basic wages. It's important to note that the salary for leave days may not necessarily include reimbursements or payments linked to attendance at the office, such as lunch/meals allowance or transport/conveyance allowance.

Maternity Leave Payments

Maternity leave is typically treated as regular leave days, and the payment for the month is made regularly rather than waiting until the employee returns to the office.

Considering Legal Action

Legal action can be taken, but many are hesitant due to concerns about their career. In the IT industry, there is a risk of being blacklisted by the employer. Therefore, before pursuing legal action, it's advisable to think carefully. While I cannot advise against moving forward with legal action, I do encourage those who are fighting against injustice. It may be prudent to first collect your service certificate and relieving order before considering any action against the company.

Role of Labor Department Officials

Labor department officials lack judicial powers; their role is to facilitate a compromise between the parties involved. Any evidence you provide during this process, whether emails or written statements, will be accepted. Even in court, emails can serve as evidence, especially when a company primarily communicates through email rather than hard copies. If the company accepts email communication as valid in general, it should not reject emails from an aggrieved employee.

Compliance with ESI and EPF Acts

The fact that a company employs more staff than required for coverage under the ESI Act or EPF Act suggests that the company may not be operating legally. If an employee is earning less than 15,000 per month, they should be entitled to benefits from the ESI Corporation. If the company is not registered under ESI, they would need to provide these benefits as per the Maternity Benefit Act.

Regards,

Madhu.T.K

Please understand that there is no law stating that maternity leave must be taken after six months of service.

Varghese Mathew
HR/Labor Law Adviser
[Phone Number Removed For Privacy Reasons]
Regards

Dear Madhu, she was asked to submit her resignation within the next 2 days. I would like to know if I will be able to approach the labor officer after she submits the resignation and get relieved.

Forced Resignation and Unfair Labor Practices

Yes, provided you can establish that it was a forced resignation. Forced resignation shall be viewed as an unfair labor practice on the part of the employer.

Regards,
Madhu.T.K

Thank you for the clear advice. I would like to update you on the sequence of events, in case it would prove beneficial to any fellow members.

Sequence of Events

My wife was relieved from the office a day after this. She was refused any other documents other than a standard relieving certificate with the date of joining and relieving, and a payslip that they managed to set up. Further calls to the company were not answered by the HR or MD, and we were told that they didn't have the 'time to waste' on this matter.

So, I took up this matter with the Labor officer. My wife and I approached him with all documentary proof like a bank statement of the amount deposited by the company, hard copies of all email communications with the company. The labor officer was quite understanding, and after listening to all we had to say, asked us to give a written request to the Assistant Labor officer explaining the matter. In the letter, we detailed the amount paid and attached a copy of the payslip given at the time she was relieved. We submitted the request and were informed that we would be updated on any progress.

Within a week, we received a call from the labor officer, who informed us that he had visited the company to collect details and verify the information we had provided. He also assured us that he would contact us with any updates in this matter.

He followed up on the case and kept us informed periodically of the progress. Finally, we were asked to meet him on a specific date and were informed that the settlement would be done on that day. We were also informed that the company officials would be present at that time. We went there and met the labor officer punctually. The company HR arrived half an hour late, and we were asked to come in together to discuss the matter. The labor officer instructed the company HR to provide the full 12 weeks' payment and informed them that the policy they were following was legally invalid. He emphasized that while the company could have a different Maternity Leave Policy, it should not be inferior to that of the official Maternity Benefit Act, as Mr. Madhu mentioned in this thread. The HR issued us a check, and we were requested to provide a written letter stating the issue had been resolved and we had no further concerns. The case was then closed.

Thanks to all the great helpers here at cite hr, we were able to win this battle. Thanks to you, more people will benefit, and individuals will not be deprived of their rights!

Regards