Can My Friend Claim Maternity and Gratuity Benefits in a Small Company?

One of my friends works in a project-based private limited (Pvt Ltd) company. Depending on the projects, the employees are recruited. At some points, the employees total 15, while at other times, they are only 7. My friend has been working in the organization for the past 7 years. My queries are:

1. Can my friend claim maternity benefits? Can she demand these benefits when the number of employees is only 8 now?
2. Since her salary is more than 35k per month, she does not qualify for government benefits such as ESI, PF, etc., which companies usually offer.
3. If my friend resigns, can she claim gratuity since she has worked for 7 years when the number of employees has been only 8 for the past 12 months?
4. If the company refuses, can she demand gratuity?

Please advise.

Applicability of the Maternity Benefit Act

1. The Maternity Benefit Act will be applicable to organizations that employed 10 or more employees during the preceding twelve months. The current number of employees is immaterial.

ESI and PF Coverage

2. Currently, the ESI Act is applicable up to a salary ceiling of Rs. 15,000, so you cannot come under the purview of the ESI Act. Regarding PF, the salary ceiling is also Rs. 15,000, but this Act allows voluntary coverage, unlike the ESI Act. So, if your company has deducted PF from your salary, then you are entitled to get PF; otherwise, not considering your present salary as well as the number of employees (which is below 20).

Claiming Gratuity

3. She can claim gratuity.

4. If she resigns, then she has to send FORM I to the company demanding gratuity. If the company fails, then a dispute/case has to be filed in FORM N before the controlling authority.

Thank you, Sir, for your valuable inputs.

With regards to point no. 3, there still seems to be some confusion. In searching through other posts in this forum, we found that gratuity is only payable by companies with 10 or more employees in the preceding 12 months. This means that if my friend's company had only 8 employees since July 2015 and my friend resigns in September 2016, she cannot claim gratuity. Could you please advise if there is any such rule in gratuity as well? Thank you.

It is known from your information that the strength varies from 7 persons to 15 persons in your company.

As 10 or more persons are working, you can claim the Maternity Benefit. If you leave the company after 5 years of service, you can also claim for Gratuity. You are fully eligible for these benefits.

Thank you very much, RiteshMaity Sir and D. Gurumuthy Sir, for your responses. I shall inform my friend to claim as advised by both of you.

Maternity benefit is applicable to all women employees, irrespective of how many employees are working in that organization. Gratuity, on the other hand, is applicable only to establishments with 10 or more employees (yes, counted for the previous 12 months).

So, your friend will be eligible for maternity benefit but not for gratuity.

I am presenting below Section 2 of the MB Act verbatim for your review with a request for correction on your part.

Application of Act

(1) It applies, in the first instance:
(a) to every establishment being a factory, mine, or plantation, including any such establishment belonging to the government and to every establishment wherein persons are employed for the exhibition of equestrian, acrobatic, and other performances;
(b) to every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months:

PROVIDED that the State Government may, with the approval of the Central Government, after giving not less than two months' notice of its intention of doing so, by notification in the Official Gazette, declare that all or any of the provisions of this Act shall also apply to any other establishment or class of establishments, industrial, commercial, agricultural, or otherwise.

(2) Save as otherwise provided in sections 5A and 5B, nothing contained in this Act shall apply to any factory or other establishment to which the provisions of the Employees' State Insurance Act, 1948 (34 of 1948), apply for the time being.

Please review the corrections and let me know if any further changes are needed.

Regards