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The Risks Of Non-compliance With The POSH law

Both men and women have a vested interest in having an impartial and well-trained Internal Committees (IC)

Photo Credit : Ritesh Sharma

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Even though the law governing the prevention of sexual harassment in India has been existent since 1997, only a handful of companies have made the effort to comply with its mandates. Known as the Vishakha judgement of the Supreme court, it was only in 2014 that corporates in India started taking Prevention Of Sexual Harassment (POSH) guidelines seriously. This Act came into effect in December 2013 and prompted companies to set up Internal Committees (IC) to comply with the requirements of the Act. However, as per the FICCI-EY report (published in 2015), 36% of Indian companies and 25 percent of MNCs had not arranged for an IC in their organizations.

What are the Stipulations of the POSH Act?

The POSH Act clearly lays down a checklist of compliances for every organization. These include a properly constituted IC, providing training in order to create awareness amongst employees, orientation and skill building for the IC, and displaying the consequences of sexual harassment through posters and signage at the workplace, to name a few. The POSH Act states that non-compliance can lead to a fine of Rs 50,000 in the first instance and thereafter, loss of license to carry out business.  

How has the Government Aided in the Compliance of POSH?

To further tighten the compliance noose, earlier this year, the Ministry of Corporate Affairs had notified an amendment to the Companies (Accounts) Rules, 2014, requiring all eligible companies to incorporate a statement in the Board of Directors Report that they have complied with the provisions relating to constitution of an IC under the POSH Act. Failure to comply can lead to fines ranging from Rs 50,000 to Rs 25 Lakhs for the defaulter company, and Rs 50,000 to Rs 5 Lakhs or imprisonment for up to 3 years, or both, for every officer in default. With this amendment, repercussions of non-compliance of POSH mandates will result in matters being taken to the Board of Directors of every company.

Violation of POSH Mandates Affects a Company’s Reputation

These mandates being made compulsory by the Government is a positive move which we can see towards the creation of safer workplaces. Apart from the risks associated with non-compliance, organizations have also realized the harmful implications of violation of POSH guidelines on the reputation of their brands. With survivors having the option of voicing their experiences on social platforms, brands now need to take proactive steps to sensitize their workforce and make them aware of their rights, including the proper channels via which survivors can file their complaints. Employees are also being educated on appropriate workplace behavior, so they are aware of the correct manner in which they should conduct themselves. It can be seen that these actions are creating an atmosphere of zero tolerance towards sexual harassment which is obviously the ideal situation.

Investments Being Made to Strengthen ICs

Organizations are making notable investments to ensure that members of the IC are adequately trained, so that they may act as a quasi-judicial institution who deal with such cases. Involving trainers to explain the nuances of natural justice, evidence appreciation, appropriate penalties which should be imposed and writing of orders, are just a few measures being taken to train non-legal professionals so that they may know how to appropriately handle such situations. Through case studies and mock situations, IC members are able to get a feel of how to effectively conduct a hearing and investigate further into such cases.

IC is No Longer Just a Compliance Requirement

For a long time, companies viewed the IC merely as a compliance requirement.  Companies with poor POSH policies and implementations and malleable ICs were not viewed as a safe place to work. Through social media, as such cases started tumbling out, corporates realized that the need of the hour was to change with the times. Instilling confidence among employees, regarding the independence and competence of the IC is now very important. 

Remember, both men and women have a vested interest in having an impartial and well-trained IC. While both genders can expect to gain justice if they are sexually harassed, they are also protected from false complaints by an effective IC. Interestingly, while most men are concerned about being falsely accused, they are also rooting for a competent ICs, because they also want a workplace free from sexual harassment, where speaking up against such acts will not be a career limiting move. As a consequence, companies have started investing in high-quality external members, who can add value to an IC by virtue of their expertise.   

The risks of non-compliance with the POSH Act, both in letter and in spirit, have never been higher. Corporate India has woken up and is taking this compliance very seriously. As a result, we are slowly but surely heading towards a safer and more egalitarian workplace.


Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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POSH sexual harassment employees workplace behaviour

Antony Alex

The author is the Founder and CEO of Rainmaker, an organization to help corporates create ethical and compliant workplaces.

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