Maternity Benefits Misuse: Can Companies Recover Costs When Employees Resign After Leave?

Maternity Law and Employee Benefits

As part of the Maternity Law, the company is required to provide eligible benefits to employees. Here, I would like to discuss a case where a pregnant employee did not resign from service solely to receive benefits as per the law. After availing 26 weeks of fully paid leave, she submitted her resignation, citing her inability to continue service due to motherhood.

In this case, it appears that the employee took advantage of the law, and the company had no option but to pay her all dues as per the law. Had she resigned before the 26 weeks, the company would not have been obligated to pay for the 26 weeks of fully paid leave and would only have paid during the notice period as per the terms of appointment (1 month).

Legal Provisions for Benefit Recovery

Is there any provision in the law to recover such benefits, given that there was a clear intention on her part not to resign before availing of the maternity benefit and to resign after 26 weeks?

Thoughts!

Dear Mr. Sanjay Vyas, the post has been written with a preconceived opinion that the woman employee has "misused" the benefits of the Maternity Benefit Act. However, this is not the case.

It would be improper to link the maternity benefits and the resignation. The Maternity Benefit Act has been designed to promote the well-being of working women after their pregnancy, whereas the resignation of the woman employee was within the ambit of the employment contract or appointment letter.

Why focus only on the exit of women after maternity leave?

Do employees leave your company or not? Have you calculated the cost of exit of each employee? What is the attrition rate in your company? Out of total exits, what percentage of women come under the category wherein they quit the employment after availing of the maternity benefit? The percentage must be a minuscule one.

Please look at the holistic picture of employee retention and not just an isolated case.

Consider the costs of poor quality and productivity

If you consider the disbursement of payment during maternity leave a cost, then let me remind you, gentleman, the cost of poor quality, cost of poor productivity, cost of inventory blockage, etc., outweigh all other costs. Mistakes galore in operations and companies erode their competitiveness because of this. Therefore, "look at the loss of pounds rather than worrying about the loss of pennies"!

Thanks,

Dinesh Divekar