News & Events

The Sexual Harassment Act

Submitted By Firm: Trilegal

Contact(s): Ajay Raghavan

Author(s):

Date Published: 7/3/2013

Article Type: Legal Update

Share This:

Due to several unfortunate incidents that gripped the collective conscience of the nation earlier this year, the subject of sexual harassment and offences against women has assumed greater significance over the past year. Consequently, in the past few months, the legislature has renewed its efforts to strengthen the legal framework. Though the Parliament has expanded the scope of the Indian Penal Code to include "sexual harassment" as a specific offence, there was a vacuum in the law when it came to regulating sexual harassment at the workplace.
 
In 1997 the Supreme Court delivered a landmark judgment, in which it laid down guidelines that defined sexual harassment and stipulated conditions for its prevention and redressal (SC Guidelines).  The SC Guidelines were meant to apply till the government came out with a comprehensive law on the subject.
 
In April this year, after going through the entire legislative process, the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the Act), became law. While it is yet to come into force, the passage of the legislation is a significant development that all employers need to take note off in the light of the various monetary penalties as well as the risk of the revocation of operating licenses for repeat offences.
 
Key Provisions
 
The Act defines 'sexual harassment' to include such unwelcome sexually determined behaviour (whether directly or by implication) such as (i) physical contact and advances; (ii) demand or request for sexual favours; (iii) sexually coloured remarks; (iv) showing pornography; and (iv) any other unwelcome physical, verbal or non-verbal conduct of sexual nature. On the face of it, it appears that the Act has retained this and several other aspects of the existing SC Guidelines, including the requirement to constitute an internal complaints committee with an external member, to deal with sexual harassment complaints. However, there are various key provisions that have been added in the Act as a result of which the law relating to sexual harassment at the workplace has become more comprehensive and has been given more teeth to ensure enforcement.
 
Complaints Committee
 
The employer must set up an Internal Complaints Committee (the Committee) to deal with issues of sexual harassment. The Committee must include individuals familiar with issues relating to sexual harassment, must be headed by a woman and one half of the total membership must be comprised of women. 
 
Additionally, if the employer has more than one office in which 10 or more people work, the Act requires the employer to set up a Committee at each of those offices of a company. In the absence of any clarification to the contrary, it would appear that even if an employer has multiple offices within the same city, separate Committees will have to be constituted at each such office. This seems to be an onerous requirement and hopefully the rules under this Act (Rules) will bring employers some relief.
 
Time Bound Inquiry Process
 
While the SC Guidelines required employers to ensure time-bound treatment of complaints, the Act has gone much further and provides for a more detailed procedure that requires the Committee to conclude proceedings within 90 days. It further expects the Committee to attempt to resolve the matter through conciliation at the aggrieved woman's request, and proceed to inquiry only if a settlement cannot be reached.
 
The Requirement to Modify Service Rules
 
Given that the general principles of the Act are more or less in line with the SC Guidelines, it is unlikely that modification of service rules to bring them in line with the Act will be too disruptive, at least for those employers who already follow the SC Guidelines. However, some additional aspects that will need to be covered, include; (i) details with regard to the manner of inquiring into a complaint; (ii) punishment for false or malicious complaints; (iii) penalty for not maintaining the confidentiality of complaints, etc. Employers would be advised to include specific provisions in this regard in the service rules, failing which the employer will be bound by the Rules prescribed by the government.
 
Monetary Compensation for the Victim
 
While the SC Guidelines laid down the process for dealing with sexual harassment complaints it never went so far as to require that the victim be compensated. The Act, however, expressly introduces the concept of compensation for the victim and lays some benchmarks for the calculation of the amount payable as compensation. In addition to facing disciplinary action, the accused employee may also have to compensate the aggrieved woman either by way of a deduction from his monthly pay or by way of a direct payment to her.
 
Punishment for False and Malicious Complaints
 
If the Committee determines that the allegation is malicious, or that it was made knowing the substance to be false, it may recommend action against the complainant (in accordance with the provisions of the applicable service rules). It remains to be seen whether this provision will operate to prevent false complaints and reverse harassment, or instead will deter women from approaching the Committee with genuine complaints.
 
Annual Reports
 
The Committee is obliged to prepare an annual report in the prescribed format with details of all the cases that have been filed and disposed off. This report must be submitted to the employer and the District Officer, who will in turn forward it to the state government.
 
Further the employer is required to specifically include the number of cases filed (if any) and details regarding their disposal in its annual report.
 
Penalties for Non-Compliance
 
Non-compliance with the provisions of the Act (including the failure to constitute a Committee, include details of sexual harassment cases in the annual report etc.) is punishable with a fine of INR 50,000 in the first instance. Repeated violations are likely to result in higher penalties. In the worst case, the employer's licence or registration to do business could be cancelled. Keeping in mind the stringent penalties that are now a direct consequence of non-compliance with the Act, employers are well advised to work to achieve stricter compliance with the provisions of the Act.
 
Some Concerns
 
While the Act, in general, is a welcome legislation bringing a greater degree of clarity and enforceability to the sexual harassment law and practice in the country, there are several ambiguous provisions that raise issues in interpretation.
 
For instance, as discussed above, it appears that employers would be required to create different Committees for each branch or establishment, even if each such office is in the same city. This seems to be an onerous and overly bureaucratic obligation that may not serve any real purpose.  Furthermore, since the Committee needs to be headed by a woman and include individuals familiar with issues relating to sexual harassment, it may practically be very difficult for employers to find such members at each of its offices.
 
Another concern is regarding the appropriate entity to conduct an inquiry where both the victim and the perpetrator are contract workers who are working on the premises of another entity (i.e. the principal employer). It is increasingly common to see companies outsource work to a single or multiple third party vendors and employees of all these vendors (also known as contract workers) work on the company’s premises. Given the extended definition of workplace which includes any place visited by the employee out of or during the course of employment, the physical premises of the company would also be the extended workplace of such vendors for the purpose of providing a harassment free workplace and handling complaints relating to sexual harassment. In the event a complaint is received from a contract worker, the Act is currently not clear on whether the vendor or the principal employer would be primarily responsible to conduct the inquiry. The issue could become even more complicated if the victim and the perpetrator are employees of different vendors. Taking a victim friendly approach, it would appear that the principal employer is primarily responsible to conduct the enquiry and then require the vendor (perpetrator’s employer) to take appropriate disciplinary action based on its findings. However, the Act currently does not address this issue clearly, and principal employers could argue that the responsibility to deal with such issues rests with the contractor.  
 
It appears from the Act that there is an obligation on the employer to report an act of sexual harassment to the police even when the aggrieved woman does not want to do so. While there could be salutary consequences to an approach of strict compliance, the inclusion of such a provision could subject the victim to unwarranted scrutiny where the need of the hour could be to guarantee her privacy and confidentiality. For instance, women may not always want to approach the police in relation to less serious incidents of sexual harassment (such as an obscene joke or a sexually coloured remark), all of which are now also criminal offences under the recent amendments to the Indian Penal Code. What is of greater concern is that irrespective of the woman's willingness to approach the police or not, if an employer fails to report the incident he may be liable for non-compliance under the Act.
 
At present no Rules have been drafted or put into place under the Act. There is some faint hope that a lot of these ambiguities will be clarified through the Rules when they are enacted.
 
Until such time, companies are well advised to use this time to reorganise themselves in order to comply with their obligations under the Act.

Find an Employment Lawyer

In all 50 U.S. states, every Canadian province, and over 135 countries. View or print a complete ELA member list by clicking here.

Find an Immigration Lawyer

Facilitate employee transfers around the globe. View or print a complete ELA member list by clicking here.

Global Business Immigration Law Handbook

Your free resource for obtaining key business immigration law information worldwide.

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

As an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel

Sanmina-SCI

Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.

Starwood

We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel  

Loading...