Article (August-2018)


Will increased maternity leaves dent the women employment prospects?

H.L. Kumar

Designation : -   Advocate, Supreme Court

Organization : -  New Delhi


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It certainly bounds to catch the attention of all when news comes from the New Zealand that their Prime Minister Jacinda Ardern has given birth to a baby daughter on 24th of June this year and she has been taking maternity leave only for six weeks although under the law of the country she is entitled to 18 weeks. Earlier also, such instances have been seen, but they are mostly in the western countries. Not long ago, the then CEO of Yahoo! Marissa Mayer of not availing any maternity leave at all. Just three days after the delivery of her baby she decided to join the duty and plunged whole-hog in her work, overall, she took just two weeks on maternity leave and worked from her home during this period. There are many other countries where the working women have been placed in very favourable conditions with regard to the maternity leave, but they avail maternity leave which is bare essential to them. On the contrary to India the trend is to avail the maximum leave which is available to them as per the statutory rights. Some countries give them the choice to avail the maternity leave in many parts.
When the Maternity Benefit (Amendment) Act came into force on 1st April, 2017 in India, it was considered a landmark reform that positioned India among the top progressive nations, enabling women to stay in the workforce after childbirth. The well - intentioned amendment entitles working women to a 26-week paid leave, up from the earlier 12 weeks, something that progressive companies were already offering. With India's women workforce participation rate dwindling from about 37% in 2005 to 27% in 2013, the Act is aimed at bringing women back into employment to boost the country's income. However, for some of the companies, cost implications are now turning out to be greater than the intention of pursuing an inclusive policy.
In the midst of several divergent voices on the Act, a study by TeamLease presents stark statistics that provide a rather grim view on women's hiring in the short term after the Act. As per the report's available with different agencies, it has been found that the extension of maternity leave up to 26 weeks has resulted into the job loss of the women. It is also reported that the job loss is quite significant.
In India, there has always been a prejudice against the employment of the women. There are many constraints for the women employees and that is the reason that the employers have been giving preference to men over women employees. This provision of the extension of maternity leave has resulted into further erosion of the loss of jobs for the women. The employers can also not be blamed for this prejudice against women because most of the mid-level industries do not have the capacity to afford the leave for 6 months to any young women employee. One of the main reasons is that it is difficult for the employers to get any replacement of such employees which is purely temporary. Secondly, if a replacement is somehow managed, it is often seen that the new and temporary recruits do not put their heart and soul in the work for which they are assigned and there is an understandable reason for this, because the sword of unemployment after six months hangs menacingly on their heads. As a consequence of it, the employer suffers the double jeopardy, firstly, the economic loss; secondly, the loss in the production.
According to newly launched Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), the Government of India will pay the full contribution of the employers to the employee provident fund scheme (EPF) for three years. This is, without doubt, a laudable scheme, as it will give the much - needed support to the employers on the one hand and on the other, it is bound to generate more employment. On the same pattern, it will therefore be desirable that this maternity leave should also be properly compensated by the government. In fact, the government bears the cost of maternity leave for the women employees, the employers will be feeling encouraged to give employment to the women employees. That will also be like providing a special privilege to women, which has been a neglected section of the society. But if it is not done by the government, the small firms and companies will shy away from hiring women.
According to a study conducted among 300 employers by an agency across 10 key sectors - aviation, BPO/ITeS, real estate, education, e-commerce, BFSI, IT, manufacturing, retail and tourism - it has been found that the attrition rate of women employees has been increasing and one of the reasons has been the maternity leave, right from the time the law has kicked-in. Historical data shows that the Indian workforce has been losing women workers at the rate of 28 lakh per year for seven years from 2004-05 to 2011-12. The net job loss (11-18 lakh for 10 sectors for FY19) over and above this number is attributable solely to the Amended Maternity Benefit Act.
In the financial year 2017, the net job creation for women was 60 lakh. However, in financial year 2018, there was a net job loss of 50 lakh (out of this, 24 lakh women exited the workforce between January 2017 and April 2017), which is an exception and attributable to demonetisation.
A report published in The Times of India 'the six-month maternity leave has had very wide and positive acceptance among large organisations. Even medium-sized organisations with Rs. 50-100 crore turnover, have accepted this and have budgeted for provision in their pay-outs for 10-12% of their employee base to be on maternity leave at any given point of time. Unfortunately, this is not the case with micro and small enterprises.' Consequently, it has witnessed the sharp decrease in the women's employment.
According to a study by the Associated Chambers of Commerce and Industry of India, 25 percent of new mothers in India quit their jobs after having their first child. And research by Catalyst shows that family responsibilities make it tougher for women to climb the career ladder : About half of working women do not go beyond junior or midlevel positions.
While there is an all-round applause from women activists and also from those who are hardly face to face with the alarming unemployment situation in the country. Populism may serve the purpose of winning appreciations for the time being but it is an undeniable fact that it has disconnect with the hard realities prevailing on the ground. The purpose of this article is not to sermonize but to make the government realistic.
There is no doubt that the maternity leave is very important for the health of the newborn baby because it enables the working woman to exclusively breast-feed her child for six months after birth, which is also recommended by the World Health Organisation. This period also enables the working mother to recuperate herself before she returns to work as well as bond with the child.
The general opinion in the industry is that if the government wants to save the small & medium scale industries and provide boost to women's employment, it must come up with an amnesty scheme or additional benefits to encourage employers to hire more women. The direct impact on women's hiring is positive for sectors like BPO/ITeS, e-commerce and IT in the short term. However, it is negative for aviation, education, retail and tourism. In the medium term, the move is expected to benefit most sectors.