ANALYZING THE IMPACT OF NON-COMPLIANCE OF THE POSH ACT, 2013 & INFLUENCE ON CORPORATE AND SOCIETY
ABSTRACT
In the long history of patriarchal structure society in India, it has been only in the recent past that women have come up and started working in the corporates. Yet there have been challenges for them such as the demand to be treated with dignity and equally as their other colleagues. Equal pay for equal work, safe and non-toxic work environment, a workplace that is intolerant towards gender-based violence and harassment are quintessential of a healthy and ideal workspace. To keep up with the minimum standards of a good and safe work environment, the support of law and legislations is also necessary. The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013[1] or the PoSH Act, is one such set of guidelines. It has evolved over a period of nearly two decades following the Vishaka Guidelines[2] (1997) laid by the Hon’ble Supreme Court. Even then it has a few lacunas in it such as the law is not gender neutral, there is uncertainty in composition of the Internal Complaints Committee (ICC) and so on. In this blog, the focal point of discussion is the reasons and impact of non-compliance on the organization’s reputation.
INTRODUCTION
The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 (also referred to as the “PoSH Act”) is an act that lays down a mechanism for dealing with sexual harassment complaints in the workplace. Prior to this legislation, “Vishaka Guidelines” laid by the Hon’ble Supreme Court in Vishaka and others v State of Rajasthan case (1997) were enforceable to deal with any issue pertaining to sexual harassment at workplace.
The PoSH Act was enforced on 9th December 2013, with the objective of protecting, preventing and resolving sexual harassment complaints of victims at workplace. The Ministry of Women and Child Development, to ensure the effective implementation of the Act, drafted the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013 (PoSH Rules).
KEYWORDS: sexual harassment, PoSH, corporate, goodwill, reputation, non-compliance, legal consequences, financial liability
EVOLUTION OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, AND REDRESSAL) ACT, 2013
The Hon’ble Supreme Court laid down in Vishaka and others v State of Rajasthan and Ors (1997), that until any legislation is formulated and enacted, the Vishaka Guidelines shall be implemented to deal with any complaint regarding sexual harassment of any women at workplace. The Vishaka guidelines recognized sexual harassment to be violative of Article 14,15 & 21 of the Indian Constitution as well as violative of human rights! It also laid down the definition of ‘sexual harassment’. This case has been of vital importance in the birth of PoSH act. Apart from the Vishaka guidelines, there have been instances where the need of eliminating violence and harassment at workplace and to codify the law regarding prevention, protection and redressal of sexual harassment at workplace was felt. Judgements that emphasized on the implementation of Vishaka guidelines in substance include Apparel Export Promotion Council v. A.K. Chopra[3], Sutapa Roy v. Seagull Book Stores Private Ltd.[4], Nalini Netto v. Neelalohitadasan and Medha Kotwal Lele & Ors. v. Union of India & Ors.[5] After a journey of 16 years (nearly two decades) post the Vishaka case, the legislation for the protection of women against sexual harassment at the workplace was brought into existence in 2013.
LACUNAS IN THE POSH ACT AND THE REASONS FOR NON-COMPLIANCE
A major shortcoming of the act pointed out is its lack of inclusiveness. It simply means that the law is not gender neutral. The purpose of the act is to create a safe working environment prevent, & prohibit sexual harassment, but the act deals with sexual harassment prevention only against woman complainants. The time when the Act was formulated and upon the instances on which it was created, women were found to be the only victims back then. However, the changing era calls for it to be made gender neutral. An Economics Times survey revealed that 19% of men have been victims of sexual harassment at the office.[6]
Secondly, there are ambiguous provisions relating to the composition of the Internal Complaints Committee (ICC). It states that the presiding officer of the ICC must be a senior woman employee of the organization. The act is silent on the matter of absence of senior woman employee in the organization and has uncertain provisions regarding appointment of junior woman employee as the ICC’s presiding officer to fulfill the requirements set out by the law. This creates confusion and thus amendment is suggested.
Thirdly, there are no mandatory provisions for the presence of external member in the committee during the inquiry process. This weakens the independence of the committee as bias and discretion of the employer can prevail to save the reputation of his organization. This can lead to situation where the spirit of the law is defeated and the act may not be able to achieve the objective for which it was instituted.
Lastly, there is no obligation on the part of the employer to entertain anonymous complaints. Many victims are hesitant to complaint directly and fear repercussions post complaint such as loss of job. Though this provision is a tedious process to bring into force but it is a needed provision as it will help victims to come up with their complaints with less hesitation.
The PoSH Act has now been in existence for almost a decade but the surveys report that the act lacks strict implementation in reality. Indian National Bar Association survey of 2017, reported that there is inadequate complying with the law and complaint and inquiry process are not clearly understood by employers and organizations[7]. As many as 23% of the organizations were not complying by PoSH Act as of 2018 survey. Apart from this, there is lack of reports and data, which make it difficult to monitor the graph of success, compliance and effectiveness of the act.
INFLUENCE OF PoSH ACT ON CORPORATES AND CONSEQUENCES OF NON-COMPLIANCE
The PoSH Act is very important to be complied with at workspaces as it promotes a sense of safety, dignity(protection) and equality for colleagues at the office. Its non-compliance would result in toxic work culture, deprivation of support to women to work in corporates and violation of fundamental as well as human rights. The corporates too have an influence of the PoSH Act on financial and reputational aspects of the organization. If the law is not complied efficiently, then it has far-reaching and severe consequences. The workplace culture is labelled to be bad and toxic; reputation is tarnished, monetary and legal repercussions are faced. Additionally, years of sweat and labor put in to earn a goodwill are shadowed negatively and jeopardized.
It has an impact on the employees as well, as they turn hostile and their agitation affects the organization’s productivity. The absenteeism of employees also causes loss to the employer.
In terms of financial repercussions, non-compliance attracts hefty fines and penalties (settlement amount) along with legal consequences such as imprisonment, cancellation of license, withdrawal/ non-renewal/ cancellation of registration for carrying on his business or activity. Indirect financial loss such as depreciation of stock value in market due to loss of reputation, affect in client base, negative mouth publicity, etc. also impact the organization. Prominent example of this instance is the case of Phaneesh Murthy, the youngest director of Infosys who was accused of harassment with his secretary and had to paid a settlement compensation of $3 million. Non-compliance can be in any form such as failure to constitute ICC or comply by ICC’s recommendations or even failure in submitted the annual reports to the district officer, and so on. Such carelessness can tarnish the image of the directors as well as the organization and the organization may receive wrath from the community. Such instances create an advantageous position for the rival companies. The Companies Act,2013 and Rules read subsequently with the corporate laws also ensure that no PoSH rules are left non-complied by penalizing defaulters. This not only reduces the legal and financial damage but also guards reputation and reduce burden. Along with it ensures that compliance is not for name’s sake or formality but a strong, independent and active ICC operates which checks & redresses grievances and also cut down false complaints, if any.
While the PoSH Act has some shortcomings persistent in it and even some corporates are to comply by it 100%, yet it is applaudable that some companies like TATA Steel and Hindustan Coca Cola are progressive and have gender neutral PoSH policies along with commendable training methods and awareness programs. Regular training programs, awareness camps at regular intervals frequently and anti-harassment policies are very important to create and maintain a safe and respectful workspace. The managerial level training programs, employer responsibility, workshops and annual report submission a part of PoSH law compliance apart from constitution of ICC and drafting policies.
FREQUENTLY ASKED QUESTIONS
Q1) WHAT INSTANCES CONSTITUTE NON-COMPLIANCE OF PoSH ACT?
It is the duty of the employer to ensure the safety of the employees and comply by the PoSH act. Its non-compliance can be seen in terms of failure to constitute ICC or failure formulate PoSH policy for organization, not organizing workshops and awareness camps at regular intervals.
Q2) WHAT IS THE AFFECT OF NON-COMPLIANCE?
The organization suffers financial as well as legal repercussions in case of default. If the organization violates the PoSH Act and rules, penalty of Rs. 50,000/- is imposed and settlement compensation is also levied.
Q3) WHAT ARE THE REASONS OF NON-COMPLIANCE OF PoSH ACT?
Lack of strictness to implement the law in proper from is one of the main reasons for non-compliance. Other reasons include uncertain and ambiguous provisions or lack of proper understanding of the law by members of organizations.
Q4) WHAT ARE THE MAJOR SHORTCOMINGS OF POSH & SUGGESTIONS TO IMPROVE THEM?
The law is not gender neutral, and lacks provisions for addressing anonymous complains. Also, it does not make the appointment of external member compulsory to ensure independence of the ICC. Amendments are suggested for these three shortcomings.
Q5) WHO IS AN EXTERNAL MEMBER AND WHAT ARE HIS DUTIES?
An external member is a neutral third party from an NGO who is committed to the social welfare of victims of sexual harassment. Its main duties are to help the organization in compliance with PoSH act and create awareness among employees and also to assist the ICC members in meetings and annual report submission to the district officer.
REFERENCES [1] Act 14 of 2013 [2] Vishaka and ors v State of Rajasthan and Ors, (1997) AIR SC 3011 [3] Apparel Export Promotion Council v. A.K. Chopra, AIR 1999 SC 625 [4] https://shodhganga.inflibnet.ac.in/handle/10603/243866 [5] Medha Kotwal Lele & Ors. v. Union of India & Ors, [2012] 9 S.C.R. 895 [6] Even men aren’t safe from sexual harassment at workplace: Survey- The Economic Times. Available at: https://economictimes.indiatimes.com/special-report/even-men-arent-safe-from-sexual-harassment-at-workplace-survey/articleshow/6389438.cms (Accessed: 11 July 2023). [7] Karan, K. (2018) Five charts show sexual harassment in workplaces is being recognised – but much more must be done, Scroll.in. Available at: https://scroll.in/article/898327/five-charts-show-sexual-harassment-in-workplaces-is-being-recognised-but-much-more-must-be-done (Accessed: 09 July 2023).
AUTHOR – Ishita Khatri