Maternity benefit law has supremacy over service regulations: HC

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

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

The HC was dealing with the plea of Bank of India, which has challanged labour commissioner order vide which the bank was told to allow maternity leave in place of sick leave for a period of 58 days availed by a woman working in the Gurugram branch of the bank. (iStock)

“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,” the court said, referring to the provisions of law and adding that the bank regulations being inconsistent with the provisions of the law, the provisions of the Maternity Benefit Act would have an overriding effect.

The HC was dealing with the plea of Bank of India, which has challanged labour commissioner order vide which the bank was told to allow maternity leave in place of sick leave for a period of 58 days availed by a woman working in the Gurugram branch of the bank.

The woman had her second child in 2019 and had availed maternity leave. However, of total leaves availed, 58 days were converted into sick leave by the bank citing banking regulations.

The woman had challenged the same before the labour commissioner, which had ruled in her favour.

It was against this order that the bank had approached the HC 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 service regulations will have precedence over the provisions of the maternity law, the bank had argued.

“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,” the bench of justice Alka Sarin said, 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.

A 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.