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.
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.
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.
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.
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.