Navigating Pay Cuts and Layoffs: Can We Lay Off a Pregnant Employee During Covid-19?

Dear All,

The management is planning to implement pay cuts and layoffs as necessary due to Covid-19. We have a pregnant employee. Can we deduct her pay or lay her off citing Covid-19 and the Maternity Benefit Act? Additionally, she is in her 7th month of pregnancy. In the event of a layoff, would we be required to provide her with 6 months of paid maternity leave as per the Maternity Benefit Act? Please advise.

Legal Considerations for Employee Termination

Legally, no, the company does not have a valid reason to terminate the employee. I have been closely studying all precedents. The legal principle that can be used by employers is "No Work No Pay." However, the honorable Supreme Court explained this in the case of Union Of India Etc. Etc vs K.V. Jankiraman as follows:

“The normal rule of 'no work no pay' is not applicable to cases where the employee, although willing to work, is kept away from work by the authorities for no fault of his. This is not a case where the employee remains away from work for his own reasons, although the work is offered to him.”

See this PAYMENT OF SALARIES DURING COVID-19 LOCKDOWN.

Advisory from the Ministry of Labour and Employment

The Ministry of Labour and Employment, Government of India, vide advisory no. M-11011/08/2020-Media dated 20/03/2020, having the title “In this critical time of the coronavirus (COVID-19) epidemic, the Ministry of Labour and Employment advises all public and private employers to support their employees and workers,” states:

“In the backdrop of such challenging situations, all the Employers of Public/Private Establishments are advised to extend their coordination by not terminating their employees, particularly casual or contractual workers from a job or reduce their wages. If any worker takes leave, he should be deemed to be on duty without any consequential deduction in wages for this period. Further, if the place of employment is to be made non-operational due to COVID-19, the employees of such unit will be deemed to be on duty.”

Maternity Benefits and Legal Protection

Now, your question is specifically related to maternity benefits. Section 12 of the Maternity Benefit Act provides: "When a woman absents herself from work in accordance with the provisions of this Act, it shall be unlawful for her employer to discharge or dismiss her during or on account of such absence or to give notice of discharge or dismissal on such a day that the notice will expire during such absence, or to vary to her disadvantage any of the conditions of her service." So you cannot do so. See this MATERNITY BENEFITS: CURRENT LAW & ANALYSIS (ARE CONSULTANTS ALSO ELIGIBLE FOR MATERNITY BENEFIT?).

Thank you so much for your message. The law also states that the employer can terminate a pregnant employee by paying a medical bonus of Rs25/-. Could you please provide more information on this for my knowledge?

Section 12 has to be read in totality.

Dismissal during absence or pregnancy

(1) Where a woman absents herself from work in accordance with the provisions of this Act, it shall be unlawful for her employer to discharge or dismiss her during or on account of such absence or to give notice of discharge or dismissal on such a day that the notice will expire during such absence, or to vary to her disadvantage any of the conditions of her service.

(2) (a) The discharge or dismissal of a woman at any time during her pregnancy, if the woman, but for such discharge or dismissal, would have been entitled to maternity benefit or medical bonus referred to in section 8, shall not have the effect of depriving her of the maternity benefit or medical bonus:

Provided that where the dismissal is for any prescribed gross misconduct, the employer may, by order in writing communicated to the woman, deprive her of the maternity benefit or medical bonus or both.

(b) Any woman deprived of maternity benefit or medical bonus or both may, within sixty days from the date on which the order of such deprivation is communicated to her, appeal to such authority as may be prescribed, and the decision of that authority on such appeal, whether the woman should or should not be deprived of maternity benefits or medical bonus or both, shall be final.

On a reading of the Section concerned, provisions of GOI order for treatment of employees during Covid, the company will be in legal trouble if they choose to terminate a pregnant employee for any ground, other than gross misconduct (which needs to have been proved earlier by an enquiry).

It is advisable to desist from actions that are illegal (as made out from what is given in the query).