Source: Kerala High Court

Why in News?

The recent ruling by the Kerala High Court in matter of Chairman PSM College of Dental Sciences & Research v. Reshma Vinod and Others, regarding the applicability of the Maternity Benefit Act to private educational institutions has stirred considerable attention. The case, presided over by Justice Dinesh Kumar Singh, stemmed from a Writ Petition filed by a Dental College and Research Centre.

• The institution contested a notice from an inspector, alleging non-compliance with maternity benefits for an employee named Reshma Vinod.
• Despite the institution's response, the inspector ordered them to pay a substantial sum to Reshma, a decision which was unsuccessfully appealed under Section 17(3) of the Act.

What was the Background of Chairmans, College of Dental Sciences & Research v. Reshma Vinod and Others?

• Petitioner is a Dental College & Research Centre, established with permission from Ministry of Health & Family Welfare, India.
• In 2017, a petitioner received a show cause notice alleging non-payment of maternity benefits under Maternity Benefits Act, 1961 (Maternity Act).
• Despite petitioner's detailed reply, the order was passed to pay maternity benefits to the first respondent.
• Petitioner appealed under Section 17(3) of Maternity Act, which was dismissed.
• Petitioner argues Maternity Act doesn't universally apply, citing specific provisions regarding applicable establishments.
• The matter lies in whether private medical educational institutions fall under the purview of the Maternity Act. The petitioner argued that such institutions, not being typical "shops or establishmenmarts," shouldn't be subject to the Act.
• On the contrary, the respondents contended that since medical educational institutions aren't exempted under the Kerala Shops and Establishments Act, the Maternity Act applies to them as beneficial legislation.
• Referring to past judgments and legislative notifications, the court determines the applicability of the Maternity Act to educational institutions.

What were the Court’s Observations?

• The Court's observation signifies that while private educational institutions may be deemed industries, they do not necessarily fall within the definition of establishments under the Kerala Shops and Establishments Act, 1960.
  • This nuanced distinction has implications for the application of the Maternity Benefit Act, as it suggests that certain institutions may not be automatically bound by its provisions prior to specific governmental notifications.
  • Establishment under the Act means an establishment which carries on any business or trade or profession or any work in connection with, or incidental or ancillary thereto. Industries would include any business, trade, undertaking, manufacture or calling of employees and include any calling service, employment, handicraft or industrial occupation or avocation of workmen.”

What is the Landmark Judgment Cited in the Case?

• Ruth Soren v. Managing Committee, East ISSDA & Others, (2000)
  • The Court held that an educational institution can be held as an industry but not an establishment.
  • In educational institutions, there is an organized activity between employers and employees to impart education.
  • Such an activity, though maybe industry, however, would not be a profession, trade or business for Article 19(1)(g) of the Constitution would not be one falling within the definition of establishment under the Act.

What is the Maternity Benefit Act, 1961?

• About:
  • The Maternity Benefit Act, 1961 is legislation that benefits the employment of women during the time of their maternity.
  • It ensures the women employee of ‘maternity benefits’, which is getting their salary paid during their absence from work to take care of the newborn child.
  • This applies to any establishment employing more than 10 employees. This act was further amended under the Maternity Amendment Bill, 2017.
  • The act is an important piece of legislation that protects the dignity of motherhood.
  • It also helps ensure that working women are able to provide proper care for their children. In addition to protecting the rights of women, maternity benefits also help women with their finances.
• Maternity Benefit Act, 1961
  • Applicability: The act applies to all establishments employing ten or more people, including factories, mines, plantations, shops, and other entities.
  • Benefit Period: A woman is entitled to maternity leave of 26 weeks, with the provision to extend it by an additional 4 weeks in case of medical complications or other specified circumstances.
  • Payment during Leave: The employer is required to pay the woman on maternity leave at the rate of her average daily wage for the period of her leave.
  • Medical Bonus: Employers are also required to provide a medical bonus to women who do not avail of the full maternity leave, as long as they have worked for a certain period preceding their pregnancy.
  • Prohibition of Dismissal: During the maternity leave period, it is illegal for employers to dismiss or discharge a woman or give notice of dismissal.
  • Creche Facilities: Establishments with 50 or more employees are required to provide creche facilities and allow women to visit the creche during working hours.

What are the Powers of Inspector to Direct Payments under the Maternity Benefit Act, 1961?

• Section 17 of the Act deals with the power of inspector to make payment to be made.
• Any Woman Claiming:
  • Maternity benefit or any other amount entitled under this Act.
  • Any person claiming payment due under section 7 has been improperly withheld.
  • Discharge or dismissal by her employer during or on account of her absence from work in accordance with the Act may make a complaint to the Inspector.
• The Inspector:
  • May conduct an inquiry on his own motion or upon receipt of a complaint.
  • If satisfied that:
    • Payment has been wrongfully withheld, may direct payment as per his orders.
    • She has been discharged or dismissed during or on account of her absence from work in accordance with the Act, may pass just and proper orders based on the circumstances.
• Any Person Aggrieved by the Inspector's Decision:
  • May appeal to the prescribed authority within thirty days from the date of communication of the decision.
• The Decision of:
  • The prescribed authority, where an appeal has been preferred.
  • The Inspector, where no appeal has been preferred, shall be final.
• Any Amount Payable under this Section:
  • Shall be recoverable by the Collector on a certificate issued for that amount by the Inspector as an arrear of land revenue.