Maternity Benefits under SS Code : Piloting it the wrong way ! – Part 1

Maternity Benefit slide_page-0001 (2)

The year was 1983. The ESI Corporation wanted to make some path-breaking changes and to bringing in suitable amendments. The Contribution Card system with stamps had already been replaced with the Contribution Card system with cash. The issue now was that the classification of employees into three sets, viz., A, B and C, was to be given a go by. Common Contribution Period and Benefit Period was being contemplated. The Hqrs. Office of the ESI Corporation asked the Regional Directors to offer their opinion. The Regional Directors asked, in turn, the field officers the Managers of the Local Offices and the Insurance Inspectors to explain their stand. The outcome was the evolvement of law which ensured the introduction of new system providing for all the practical difficulties in its implementation.  The opinions offered ensured that the procedure evolved was not only not cumbersome but also one that advanced the purpose of the Act.

Hear the subordinates

Such a practice of obtaining opinions from subordinates in the field was followed, again in the year 1988, before certain vital amendments were made in the ESI Act, in the year 1989. The management principle recommended by Mr. Gordon M.Bethune, former Chief Executive of the Continental Airlines was to ‘hear the subordinates’. For, he knew that they knew more about the work and the weak-spots.

Gordon Continental Airlines

Mr. Bethune said, “I was a mechanic in the Navy. And mechanics in the Navy are like mechanics in airlines. You may have more stripes than I do, but you don’t know how to fix the airplane. You want me to fix it? You know how much faster I could fix the airplane when I wanted to, than when I didn’t want to? So I’ve always felt that if you treat me with respect, I’ll do more for you.”…”And we never lied. You don’t lie to your own doctor. You don’t lie to your own attorney, and you don’t lie to your employees.” (Corner Office -Adam Bryant – 02.01.2010 – New York Times).

Legislative Policy,  kept a mystery

But, here is a bureaucracy, now, at the centre, especially in the Ministry of Labour & Employment and in the Ministry of Law & Justice, which does not hear even the Corporation, the supreme body of the ESI Corporation, let alone its Director General or his subordinates. Because many of the provisions in the Bill No. 375 of 2019 are intended to destroy the well-conceived social security network that provides social insurance and enable the private players to loot the masses in the name of commercial insurance. The bureaucracy is, therefore, afraid of the proper law-making process.

What is more? Even the Director General of the ESI Corporation and the Central PF Commissioner of the EPFO were not made aware beforehand and at every crucial stage, what was being drafted by the Drafting Team of the Labour Code, although the Ministry of Labour enacted a drama of roping in some junior officers from these organisations to be part of the team. More of this can be read in the following links:

These two ministries have been made captives by their political masters, and have been made to prepare a law that is intended to serve only those private interests and not public interest. In the absence of publication of the Legislative Policy, the Bill No. 375 of 2019 deserve only be categorised as a Private Bill dressed up as a Bill mooted by the government.

Innumerable dubious words, phrases and clauses inserted on the sly at various places for wrong reasons in the said Bill, indicate clearly that the intention of these Ministries is not to give priority to run the ESIC corruption-free  but to destabilise it and provide a ground for the private players to cheat and loot the public. These bureaucrats forget or suppress that the ESI Act does not prevent private players from operating even now on the same field, provided they are ready to provide benefits which are superior or substantially similar to the ones provided by the ESI Corporation. That they are not interested in giving priority to eradicate corruption would become evident from the manner in which the CAG himself has not filed counter-affidavit in the W.P. 35184 of 2016 pending before the Hon’ble High Court of Madras for the past four years.

Pulling wool over the eyes of law-makers

The Statement of Objects and Reasons and the Notes on Clauses, justifying the Bill No. 375 of 2019 are full of half-information, misinformation, disinformation and no-information on various core issues. They are intended to deceive the parliamentarians and get them vote for this dubious Bill to make it a law. The method of manipulation adopted by them in meddling with the Maternity Benefit provisions, through this ill-conceived Bill would give real shock to every well-meaning citizen. The unholy nexus between the ‘educated’ officers in these Ministries and the ‘private interests’, causes the former to assist the latter by subverting the due process of law, and enacting laws which are clearly against the interests of the working women whose living conditions do not matter for these high-paid officials.

Their actions bring into existence a law that would never attain its proclaimed goal but would ensure that the society is made chaotic and insecure. There is no explanation anywhere as to why and by whom and at whose instance various unlawful tinkerings have been made in the ESI Scheme, without any written direction to anyone by anyone. What has happened is a conspiracy by the top officials against the large masses of the nation whose voice cannot be heard and whose living conditions do not matter for these officials. All these officials are required to be made accountable for such commissions and omissions. They are the persons responsible for piloting the highflying aircraft to disastrous crash.

Clause 32 (1) (b) and Clause 32 (3) of the Chapter IV read with the entire Chapter VI of the Bill on the Code on Social Security, 2019 (Bill No. 375 of 2019) in the matter of Maternity Benefit provide a classic example of collusion of various vested interests to deny the large multitude of workingwomen of the nation the Maternity Benefit that was available to them under the existing provisions of the ESI Act for decades and decades.

Shock ad infinitum

The manner in which questionable words, phrases and clauses have been inserted at various places, in the Bill No. 375 of 2019, with the intention of cheating the workforce, causes a lot of depression and annoyance even for a reader. One wonders how the educated bureaucrats could stoop so low to deceive the poor people of the nation and to please the rich anti-labour elements and prepared such a draft Code to make patently unlawful things lawful. It is very sad and it causes depression and annoyance in the reader. One has to take a lot of efforts to motivate oneself to come out of such depression, before and for writing about the social impact of such cunning insertions in the Code.

The text of the Bill No. 375 of 2019 shows that the persons behind the Bill wanted to drastically reduce the quantum of Maternity Benefit available to the working women and make it just a farce. And the bureaucracy obliged willingly (Details in Part 2).

ESI Act and MB Act do not go together

When the ESI Act 1948 is in force in a factory or establishment, there is be no need or scope for the Maternity Benefit Act, 1961 to be applied to the Insured Women of that unit. For example, when the wage ceiling for coverage under the Maternity Benefit Act is Rs. 15000 pm, and the wage ceiling for coverage under the ESI Act is Rs. 21000 pm, there will be no need for the Insured Women covered under the ESI Act to seek benefit under the Maternity Benefit Act. The Maternity Benefit Act, therefore, does not operate and is not applicable to the said factory or establishment, as had been made clear in the Statement of Objects and Reasons of the Maternity Benefit Act in the year 1961 itself.

Yet there was the need for the Maternity Benefit Act to be in existence, as all the factories and establishments everywhere in the nation were not covered or coverable under the ESI Act.  The ESI Act could not be implemented and is not implementable everywhere, in practice, unless there was a cluster of factories or establishments justifying the setting up of a dispensary with doctors, nurses and para medical staff ( or at least a mobile dispensary ) before implementing the provisions of the ESI Act in that area. Consequently, the factories and establishments in outlying areas were made to enforce the Maternity Benefit Act, 1961, for the women working there. In other words, whenever the ESI Corporation wants to extend its operation to a new area where there are adequate number of factories and establishments and the families of insured persons, it is required to notify through the gazette of its intention to implement the scheme in that area. Such an area is called as “Implemented Area”. The ESI Act can thus be extended only in phases.

That was the reason the phrases, “different dates” and “different parts” have been inserted in Sec. 1 (3) of the ESI Act, in the year 1951 itself very thoughtfully.  But the present Bill on the Code on Social Security does not show that it took into account the concept of “Implemented Area” at all, when its Clause 1 (3) it refers to the applicability of the Code which is pending consideration of the Lok Sabha now.

As a result, one has to presume that the persons who drafted the Bill No. 375 of 2019 intended to enforce the provisions of the present ESI Act everywhere throughout India at one go, through the aforesaid Clause 1 (3) and Chapter IV of the said Bill. Well, but one does not understand the need, then, for the enforcement of the provisions of MB Act, 1961 anywhere in India, through Chapter VI of the same Bill.

ESI Act and MB Act can go together

Still, it is possible to enforce the enforce the provisions of the Maternity Benefit Act, 1961 (proposed Chapter VI of the Bill No. 375 of 2019) in the same factory in which the ESI Act, 1948 (proposed Chapter IV of the same Bill) is in force, if the wage ceiling for coverage of working women under the Maternity Benefit Act (proposed Chapter VI) is more than the wage ceiling prescribed under the ESI Act (proposed Chapter IV). But such decisions had never been taken by the government during the last 59 years, after the Maternity Benefit Act came into force. The liability to pay the Maternity Benefit under the ESI Act, 1948, is taken over by the ESI Corporation while the liability to pay the same benefit under the MB Act, 1961, is on the shoulders of the employers, with varies consequences.   The wage ceiling for coverage under the MB Act, 1961 had, therefore, been kept always below the ceiling provided under the ESI Act, 1948.

In other words, the ESI Act and the MB Act cannot apply to the same factory or establishment as long as the wage ceiling for coverage under the MB Act remains lower than the ceiling provided under the ESI Act.

In other words, the ESI Act and the MB Act cannot apply to the same set of working women at one and the same time. Consequently, Chapter IV of the Bill No. 375 of 2019 and Chapter VI thereof cannot apply to the same set of working women at one and the same time. The provisions of Chapter IV would alone prevail.

Definitions and absence of definitions

While these are vital technical incongruities in the Bill No. 375 of 2019, with reference to the definition and absence of definition for crucial words, which do have far-reaching consequences, the definition of the term ‘wages’ given in the said Bill and is made applicable for Chapter IV and VI make the entire Code a chimera. The Code simply pretends to provide Maternity Benefit to working women while it actually reduces drastically the benefit now available to them both under the ESI Act, 1948 and the Maternity Benefit Act, 1961. (This happens not only to the Maternity Benefit but also to all other benefits provided under the ESI Act, at present).

\The significance of such lapses in the Bill will be placed before the readers in the upcoming pieces, pertaining to Maternity Benefit, separately one by one, with reference to various court verdicts under the MB Act, 1961. They are stories of human tragedies showing the conflict of interest in the functional relationship between the benefit-needing employees and the profit-seeking employers (who prefer donating hefty amount to the political parties and bribing the politicians and officials while, at the same time, reducing the wages and total strength of their staff). Numerous instances of such cruelties are on record throughout the world indicating the uncivilised nature of the Strong against the Weak and Meek.

It would be appropriate in the context to recall an incident that had happened more than a century ago when an employer did not want to pay Disablement Benefit to his employee who was suffering from life-threatening employment injury sustained by him during the course of and out of his employment in the factory of the employer concerned. The employer chose rather to pay a hefty fee to a ‘clever’ lawyer, who used all the dishonest means to enact a drama in the court and had, sadly but successfully, helped the employer deny the legitimate dues payable to the poor workman. The present Bill No. 375 of 2019 is, directly, leading the Indian society in that undesirable direction.

Employee Vs. Employer

It was the 19th century England when Commoners chose to sit and suffer injustice in silence than to stand up and fight against in the costly courts. Not every employer in England was the noble George Cadbury. The money power of merciless employers and the cleverness of dishonest lawyers worked against the workmen.   As a result, cases were decided not on facts.

There was an employee of a railroad company who had sustained injury during the course of employment. He was denied compensation by the employer-company. He approached the court seeking remedy. His case was that the accident had resulted in his becoming a victim of neurasthenia or nervous prostration. The evidence produced by him showed that because of that problem, his mental and physical health had deteriorated rapidly. It was also proved during the cross-examination of an expert doctor that the workman was suffering from neurasthenia. The expert witness informed the Court that the workman suffered no pain when pricked with a pin on top of the head and that was a sure sign of his suffering from neurasthenia.

The lawyer for the defendant-company of the employer began his argument. He was “an ex-judge, somewhat advanced in years and exceedingly resourceful”. Incidentally, “he was as bereft of hair as the oft-cited billiard ball. When it came time to argue the case to the jury, he proceeded to expound the facts with clearness and vigour for a considerable length of time and finally approached the subject of neurasthenia.”

He paid his respects to the learned doctor who was called in as an expert witness. He then expressed his surprise and astonishment at the conclusion arrived at during the examination that “one who did not experience pain by the prick of a pin on the top of the head was a neurasthenic and rapidly progressing to complete mental decline.”  He, then, informed the jury that he was under the impression that he was a man of reasonable physical vigour and had always supposed that he was still possessed of his normal mental faculties. But he became afraid that he discovered that he himself was a hopeless neurasthenic as per the evidence given by the expert doctor. If he was a patient suffering from neurasthenia, he had no business trying lawsuits, but “should be preparing rapidly to meet his Maker”, he added.

“Thereupon he turned back the lapel of his coat and extracted good-sized needles, which he promptly stuck in the top of his head. He kept this up until he had some ten or twelve needles sticking in the top of his bald head and looked like an animated pin cushion”. He finished his argument.” Everyone was stunned.  The verdict returned was “in favour of the defendant”, i.e., the employer.

But what had happened was that the lawyer had got a portion of his scalp injected with cocaine with the help of a physician to avoid feeling pain when sticking the pins on his head. He had thus cheated the Judge, the Jury and the Law with the only aim of denying the legitimate compensation payable to the workman who was actually suffering from neurasthenia as a result of the employment injury sustained by him.

In later years, the lawyer confided to the same judge, Mr. Justice Faville, “that the last needle got outside the area of the cocaine which his physician had hypodermically injected into his scalp just before he began his argument and had almost unmasked the hoax”. He had to pretend hard that there was no pain although the last needle gave him very sharp pain.  (Ref: Oxford Book of Legal Anecdotes – Michael Gilbert – Oxford University Press –Pages 10-11). The hapless worker simply suffered and there was no one to help him.

The Questions and the Answers

Who will save such workers from the tentacles of such employers and advocates, if not the State? What else should be the responsibility of the State? Why should the State abdicate its Constitutional responsibility and privatise the social security in India? Why should the people of a nation allow its rulers to make the State abdicate its responsibility to provide Social Security?

In the Indian context, which employee of the nation asked for lesser Maternity Benefit than what is being provided under the ESI Act? Should not the bureaucrats be made to give reply to this question in the appropriate forum?

Will these ‘educated’ bureaucrats who give all impressions that they prepared the draft Code without any legislative policy given by anyone, and have exercised unlimited discretion to prepare the Code as they pleased, allow the already evolved democracy in India to survive and allow the ESI Corporation to flourish?

Atifete 2


  • Let the Indian government hold a survey among the Insured Persons and the beneficiaries of the ESI Corporation first in a honest and transparent manner. A cursory survey done in Mumbai in the latter 1990s showed that 85% of the insured persons wanted the ESIC while 85% of the employers did not want. That sums up the entire picture.
  • Let them make the CAG, who is shying away from the W.P. 35184 of 2016 for the past four years, to file counter-affidavit at least now, that the bureaucratic cartel that colluded together in mismanaging the funds involving thousands of crores would come to light.
  • Let them allow the ESIC to be run corruption-free! The ESIC will, then, reach greater heights!!


Images; Courtesy: Web.


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