[India] High court rules maternity benefit law has supremacy over service regulations

The Punjab and Haryana high court has held that the Maternity Benefit Act, 1961, will have supremacy over service regulations of a financial institution if they are in conflict with each other, Hindustan Times reports.

The court said, “Section 27(1) specifically provides that the provisions of the Maternity Benefit Act will have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement or contract of service whether made before or after the coming into force of this Act,” referring to the provisions of law. It added that as the bank regulations were inconsistent with the provisions of the law, the provisions of the Maternity Benefit Act would have an overriding effect.

The high court was dealing with a plea from Bank of India, challenging a labour commissioner order vide which told the bank to allow maternity leave in place of sick leave for a period of 58 days for a woman working in the Gurugram branch of the bank.

The woman had her second child in 2019 and had made use of her maternity leave. However, of the total leave taken, 58 days were converted into sick leave by the bank which cited banking regulations. The woman had previously challenged the action before the labour commissioner, which had ruled in her favour.

The bank responded by approaching the high court, arguing that banks are governed by the Bank of India (Officers’) Service Regulations, 1979, and that these regulations have been made in exercise of the powers under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 by the board of directors in consultation with the Reserve Bank of India (RBI) with the previous sanction of the central government and have the force of law.

The bank argued that the service regulations had precedence over the provisions of the maternity law.

The bench of Justice Alka Sarin said, “It is a social welfare legislation under which every woman employee is entitled to and her employer is liable to pay the maternity benefits... the bank has not been able to show as to how… (it) is not applicable to the petitioner bank,” adding that the regulations may have been framed in consultation with the RBI but a statutory regulation is subject to the provisions of a Parliamentary Act.

Subordinate legislation must be made in conformity with the Parliamentary Act, the court said, adding that the bank regulations do not provide the same maternity leave and other benefits to which a woman employee would be entitled to in terms of the law.

To the argument that the bank is not covered under the Punjab Shops and Commercial Establishments Act, 1958, the court said the definition of commercial establishment in the 1958 law specifically includes banking, making it clear that it is covered by the Establishment Act.

“Once the petitioner bank is covered within the definition of commercial establishment, the provisions of the Maternity Benefit Act will clearly apply to the petitioner bank as well,” the court said, dismissing the plea.

The Punjab and Haryana high court has held that the Maternity Benefit Act, 1961, will have supremacy over service regulations of a financial institution if they are in conflict with each other, Hindustan Times reports.

The court said, “Section 27(1) specifically provides that the provisions of the Maternity Benefit Act will have effect notwithstanding anything inconsistent therewith contained in any other law or in the terms of any award, agreement or contract of service whether made before or after the coming into force of this Act,” referring to the provisions of law. It added that as the bank regulations were inconsistent with the provisions of the law, the provisions of the Maternity Benefit Act would have an overriding effect.

The high court was dealing with a plea from Bank of India, challenging a labour commissioner order vide which told the bank to allow maternity leave in place of sick leave for a period of 58 days for a woman working in the Gurugram branch of the bank.

The woman had her second child in 2019 and had made use of her maternity leave. However, of the total leave taken, 58 days were converted into sick leave by the bank which cited banking regulations. The woman had previously challenged the action before the labour commissioner, which had ruled in her favour.

The bank responded by approaching the high court, arguing that banks are governed by the Bank of India (Officers’) Service Regulations, 1979, and that these regulations have been made in exercise of the powers under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 by the board of directors in consultation with the Reserve Bank of India (RBI) with the previous sanction of the central government and have the force of law.

The bank argued that the service regulations had precedence over the provisions of the maternity law.

The bench of Justice Alka Sarin said, “It is a social welfare legislation under which every woman employee is entitled to and her employer is liable to pay the maternity benefits... the bank has not been able to show as to how… (it) is not applicable to the petitioner bank,” adding that the regulations may have been framed in consultation with the RBI but a statutory regulation is subject to the provisions of a Parliamentary Act.

Subordinate legislation must be made in conformity with the Parliamentary Act, the court said, adding that the bank regulations do not provide the same maternity leave and other benefits to which a woman employee would be entitled to in terms of the law.

To the argument that the bank is not covered under the Punjab Shops and Commercial Establishments Act, 1958, the court said the definition of commercial establishment in the 1958 law specifically includes banking, making it clear that it is covered by the Establishment Act.

“Once the petitioner bank is covered within the definition of commercial establishment, the provisions of the Maternity Benefit Act will clearly apply to the petitioner bank as well,” the court said, dismissing the plea.