How extending the maternity leave to six months would affect women participation in the workforce?
The Maternity Benefit Act was passed in 1961 to regulate the maternity establishments before and after child birth. Asia’s third largest economy and one of the biggest markets for consumer goods in the world made a landmark amendment in the Maternity Bill by entitling the women employees in the organized sector to six months of paid leave. Labor minister Mr. Bandaru Dattatreya announced it as a gift on International Women’s Day. The present government was successfully able to find a sweet spot between the prevailing 12 weeks benefit and the proposed 9 months relief by granting the women employees a leave for six months. The first legally binding international document concerning child rights was the Convention on the Rights of the Child, 1989, which was also ratified by India in 1992.
The Convention required its member states to ensure to the maximum extent possible child survival and development foot, render appropriate assistance to parents and legal guardians in the performance of their child rearing responsibilities and ensure the development of institutions, facilities and services for the care of children.
The Sixth Central Pay Commission of India made a recommendation in 2015 to relax the period of maternity leave to six months for Central Government employees, which was considered and subsequently implemented. After state interventions it became clear that the private sector and the government sector is also interested in moving the tentacles of this act to cover the women in the organized workforce. After successful passing of the bill in the Parliament it is set to impact 1.8 million women across the country. The amendment will not only encourage more women to take up their jobs even after giving birth but also give them their well-deserved relief. The maternity leave is awarded with full pay on completion of at least 80 days in an establishment in the 12 months prior to her expected date of delivery. The maternity benefit is awarded at the rate of the average daily wage for the period of a worker's actual absence from work. Apart from 12 weeks of salary, a female worker is entitled to a medical bonus of 3,500 Indian rupees.
The labour force participation rate (LFPR) in India is around 40%, but for females, it is only 22.5%. The gap in male-female LFPR is such that the LFPR for rural women above 15 years is only 35.8%, while for rural males it is more than double at 81.3%, according to a 2015 research paper by the government policy think tank NITI Aayog. However, in the midst of all this happiness vests a concern over the number of women that would be encouraged by corporates to take up the corporate career. The corporate ladder is much steeper than a government climb and increasing the maternity leave would indirectly affect the hiring decisions of women employees in innumerous big corporate houses who make money at an hourly rate. It might look good on paper but its acceptance is dependent on its acceptance by the corporate houses. A 2016 World Bank showed India’s gender gap in workforce at 53 percentage points, higher than its neighbor Nepal (at seven percentage points). Between 2004 and 2011, women in the Indian workforce dropped from 35% to 25%, according to an International Labour Organization (ILO) report published in 2016. Since the law applies to all the companies which include startups as well, the acceptance of this law remains a concern. In this monopolistic world, every company is aiming for higher profits and starts ups cannot afford to lose out on even a single labor hour. Moreover, India encompasses a higher stress environment compared to other countries in terms of work pressure in corporate houses which worsens the situation and makes even cumbersome for women to return to work after availing the maternity leaves.
The biggest disincentive for implementing the new rule in India is for employers to bear the costs alone. In many countries, the cost is either shared or entirely foot by the government. In France, Australia, and Canada public fund are used to pay for maternity leave while in U.K and Singapore, both the employer and public funds pay for the maternity leave. Another problem with the current Act is that its legal provisions do not lay down penalties for those not giving the 6-month maternity leave, but expect self-regulation. Rupa Subramanya, economist and independent researcher said, “We have a problem of labour force participation by women in India. Estimates vary between 20-25%... one of the lowest in the world. And this Act will further skew this. Employers will be hesitant to implement this as the onus lies on them to pay for it. Employers will also be reluctant to hire more women.” Many big corporates like PepsiCo, GSK and TVS Motors have shown support for the bill by self-implementing the provisions of the bill but how would the larger audience respond to its applicability and acceptance is still not sure. Lack of a separate body to oversee its compliance also threatensits successfulness. If a breach arises then without a separate body looking after it, the situation can get worse. Just like any other law, in the world’s largest democracy depends upon its implementation, the Maternity Benefit Act is also like a lose hanging sword, the blades of which hang between the government’s ability to implement it and its acceptability by the majority of corporations.
References:
Source: Article 6 of the Convention, Law Commission Report, 2015 (https://lawcommissionofindia.nic.in/reports/Report259.pdf)
Source: Article 18 of the Convention, Law Commission Report, 2015
Source: Notification O.M. No. 13018/2/2008-Estt. (L) dated the September 11, 2008, Government of India, Department of Personnel and Training (Effective September 1, 2008)
Source: https://paycheck.in/labour-law-india/maternity-and-work
Source: Lok Sabha passes bill to raise paid maternity leave to six months, LiveMint, Author: Prashant K Nanda