New Delhi: The Supreme Court on Thursday held that maternity benefits have to be granted even if the period of benefit overshoots the term of contractual employment.
Maternity benefits can travel beyond the term of contractual employment. The court underlined that the statute itself envisions the continuation of benefits beyond the term of employment, asserting that entitlement to medical benefits, as stipulated under Section 5, Maternity Benefits Act, 1961 goes beyond the confines of employment duration.
The apex court was hearing the petition of a pathology doctor who was denied maternity benefits on the grounds that her contract expired during the period of maternity leave. The 3-judge bench comprising Justices Aniruddha Bose, Justice Sanjay Kumar and Justice SVN Bhatti was hearing an appeal against a Delhi High Court ruling that had restricted maternity benefits to a mere 11-day period, citing the expiration of a contractual agreement.
The court directed the employer to pay maternity benefits as would have been available in terms of Sections 5 and 8 of the Maternity Benefits Act, 1961 and payment to be made within 3 months.
The court observed “Section 12(2(a)) of the Maternity Benefit Act, 1961 contemplates entitlement even for an employee who is dismissed/discharged during her pregnancy. Thus, inbuilt in the statute itself there is a provision for extending benefits for a period beyond the term of employment. What the statute contemplates is the entitlement of medical benefit which accrues by fulfillment of condition under section 5 and benefit can travel beyond the term of employment also and it’s not co-terminus with the employment period.”
The court also referred to previous judgments which had upheld the principle of extending maternity benefits and noted that section 27 of the Act overrides other laws and agreements.
The main issue for determination before the court was whether maternity benefits would apply to contractual employees if the period of benefit overshoots the contractual period?
Advocate Rachita Garg sought on behalf of the respondent argued that once the term of the contract ends, there cannot be a notional extension of same by giving her the benefit of the 1961 Act. Any benefit she would be entitled to ought to be within a contractual period and the same cannot extend beyond that period.
At this juncture, Justice Sanjay Kumar asked her “There's no discussion on s. 12(2(a) at all? How do you get over that provision? Discharge is a wide term, even dismissal will not disentitle to get all benefits even after termination of employment. Here, only her term has expired and she stands on a much better footing.”
The respondent replied, "if we grant benefits then they’ll come to us saying that the contract has been extended".
The Bench remarked that “he's not even asking for that. In this case, there’s no way you can get over the statutory scheme".
Background of the case
The appellant had joined as a pathology doctor on a contractual basis at Janakpuri Hospital run by NCT, Delhi. Her contract was subject to renewal every year for up to max 3 years.
On May 24, she applied for maternity leave from June 1, 2017 in terms of section 5 of Act,1961. The employer however provided benefits only up to June 11 on the ground that after the end of 3 year contractual period, she became disentitled to any benefit under said statute.
The appellant unsuccessfully challenged said action before CAT and Delhi High Court.
(With LiveLaw inputs.)