The reason why #MeToo campaign is a wakeup call for companies in India

published on October 23 / reading time approx. 3 minutes

In India as well as all over the world, newspapers are full of headlines regarding the #MeToo debate and new articles everyday arise regarding the different incidents of sexual harassment faced by women. Although this news has been made globally famous regarding instances cited by stars and celebrities, #MeToo has a much wider reach than it might appear. #MeToo has drawn attention to sexual harassment related incidents and how workplaces across all industries and spheres have to find ways for women to work with dignity, decency and due respect as well as find solutions and mechanisms to address claims, start investigation, issue reprimands, etc. to protect the employees and the image of the company. In last few days there is sudden increase in the number of organizations rushing to consultants providing training solutions for sensitising the workforce and internal complaints committee (ICC) members to be fully compliant with provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”).

The POSH Act provides for a wide terminology as to what constitutes sexual harassment for women. This includes direct or indirect implication of sexual harassment by physical contact and advances; a demand or request for sexual favours; making sexually coloured remarks; showing pornography; any other unwelcome physical, verbal or non-verbal conduct of sexual nature. It also includes implied or explicit promises of preferential treatment or threats of detrimental treatment at the workplace; present or future employment status and creation of offensive and hostile work environment which includes humiliating treatment which may affect the woman’s health or safety.

The Mumbai High Court clarified the term “workplace” where it stated that the term must take into account the actual place of work and the areas connected to it, including the transport that the employee uses for commuting to her workplace. The Delhi High Court upheld the termination of employment of the accused who was alleged to have sexually harassed a female colleague during an outstation visit for work. It should be noted that complaints received even from the cleaning maids, women security guards, etc. are also covered within the ambit of the POSH Act though they may not be employees but contract labour of the company.
 

​Are you aware of your liabilities?

POSH Act makes it clear that the liability of implementing the POSH Act’s mandates and providing a safe work environment falls on the Employer which includes the Board of Directors or its committees, any internal officers or any person who is in a top managerial or supervisory role.

 
If the employer does not follow the provisions of the POSH Act, he will be liable for punishment with a fine of up to INR 50,000 and the company’s business license can be cancelled in case of repeat offenders by the authorities.

 
In addition to the above under POSH Act, as per the Amendment of the Companies (Accounts) Rules, 2014, it is mandatory for companies to disclose in their Director’s Report whether they have constituted an ICC or not, whether an anti-sexual harassment policy exists in the company and whether the company has received any complaints in the year, and the actions taken so far. This Board Report is filed with the Registrar of Companies and is a permanent and public record. Any breach of these provisions may also invite a penalty under Companies Act, 2013 which can be from minimum INR 50,000 up to INR 25,00,000 and imprisonment up to 3 years for directors. This makes the directors liable and if a director is sentenced to imprisonment for a term more than 6 months, he/she will be disqualified to act as a director for a period of 5 years.

Status of your Indian subsidiaries?

In comparison to other countries, India has only in recent years developed such strict anti-sexual harassment policy requirements and punishments which is the reason why the implementation of the POSH Act and other relevant Acts are being pressed into the forefront much more aggressively by media, authorities and courts of law and companies and their management are being held accountable. 

 
Thus, companies in general in India must ensure that the regulations of the POSH Act along with relevant portions from other Acts are implemented. It is a necessary step to curb exposure to Management, avoid potential litigations, providing a safe work environment and promoting a responsible image of the company.