Can I Get 180 Days Maternity Leave in a Small Company with Just Two Employees?

Hi,

I am working in a Private Limited Company that has a license under the Shop and Establishment Act. There are only two employees, including myself, in the company. We have group companies, and I have been working for the past 8 years with the organization. The Maternity Act of 1961 states:

Application of Act.
2. Application of Act.- 5*[(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:]

So, can I avail the benefit of 180 days leave as per the amendment act of 2017?

Determining Applicability Under Labor Laws

If there are other companies under the same management, and if there exists financial integrality among different companies within the same group, there is a chance that employees will be grouped together to determine the applicability under the ESI Act, EPF & MP Act, ID Act, or other Acts. Consequently, you may also become eligible for maternity leave. The tests to determine this are as follows:

1. You may have different RCs under the Shops Act for each office, but the controlling authority is the same.
2. There are funds transfers occurring between establishments.
3. Accounting work is centralized at one office, such as the group's head office, where employees handle the work for all establishments.
4. Employees from one establishment may be transferred to another, including temporary arrangements.
5. In your office, you may not have a reporting officer, but for matters like leave requests or salary advances, you would communicate with another person at a different office, such as the HO.

The above-mentioned tests can demonstrate that, for the purpose of labor law compliance, all establishments under the management should be considered together. Therefore, you need to determine how many employees you have and take appropriate action.

Thank you for your quick reply. We have group companies under the same management, and the other company has more than 10 employees. However, there is a twist in the situation. The criteria of having 10 employees had been overlooked by us, and I have already received 5 months' salary from that company, which has only two employees. Now, suddenly, management has brought up this issue and is saying that I am not eligible for Maternity Leave.

Inquiry about management discretion on maternity leave

I would like to inquire whether, even if the law does not allow maternity benefits for a company with only two employees, can management choose to provide this benefit at its discretion? Would there be any non-compliance if the company takes the stance that this leave was granted at the discretion of management?

Management can give Maternity Benefits even if they have one employee at their discretion. They can give extra benefits as well. No law stops them from providing some benefit or payment. However, an employee cannot demand what is not authorized by law or mutual agreement.

The concept of a group of companies, as accepted, and accordingly, maternity leave granted cannot be withdrawn. The fact that all the establishments under the group can be considered as one in the eyes of the law should be taken as a defense to say that you are eligible for maternity leave.

As per my understanding, Shops & Establishments License is issued to companies having 9 or more employees. In fact, if you try to get a license online and indicate you have less than 9 employees, you can't go further. I mention this because if your company goes for renewal, there is a chance they will be told it's not necessary. So you may not get any S&E benefits.