26 May 2014 – In April 2013 the Sexual Harassment of Women at Workplace Act (“Sexual Harassment Act”) passed the Indian parliament. It became effective in December 2013. The Times of India now reports that many of the larger companies have implemented measures as required by the Sexual Harassment Act. Most companies, however, are still discussing the appropriate measures to be taken. They are in particular reluctant to accept third parties as members of their Internal Complaints Committee. The Sexual Harassment Act has been enacted almost 16 years after a landmark judgment of the Supreme Court of India (Vishaka and others v. State of Rajasthan), in which the court laid down guidelines making it mandatory for every employer to provide a mechanism to redress grievances pertaining to workplace sexual harassment and enforce the right to gender equality of working women. When and where does the Sexual Harassment Act apply? The Sexual Harassment Acts main purpose is to protect women from sexual harassment at their workplace. The law applies to public bodies and private entities. Sexual harassment in the sense of the Sexual Harassment Act includes unwelcome acts or behavior like physical contact and advances, a demand or request for sexual favors or making sexually colored remarks or showing pornography or any other unwelcome physical verbal or non-verbal conduct of sexual nature. As per the Sexual Harassment Act, a workplace also covers within its scope places visited by employees during the course of employment or for reasons arising out of employment – including transportation provided by the employer for the purpose of commuting to and from the place of employment. What are the penalties for harassers? If a person is found to have sexually harassed a woman at the workplace, he faces disciplinary sanctions like withholding of promotions and increments, up to termination of employment. He may have to pay the victim a reasonable compensation as a result of the harassment. The Sexual Harassment Act, however, does not only protect the women but also the victims of false accusations. If allegations against the accused turn out to be false and after inquiry, are found to be made with a malicious intent, the person who had filed the complaint may face similar penal provisions as a harasser. What measures do companies have to implement? Every organization, in particular every company, is obliged to set up an ‘Internal Complaints Committee’ at each office or branch, of an organization employing at least 10 employees. The committee shall consist of at least three members. Two of the committee members should be employees of the company and have experience in social work or legal knowledge. The third member should be from a non-governmental organization or association familiar with the issues relating to sexual harassment. The chairman of the committee should be a female senior level employee of the company. At least half of the committee members must be women. The members must be replaced every three years. The Sexual Harassment Act also suggests the constitution of a local complaints committee consisting of at least a social worker with five years of experience in the relevant field, a person familiar with labor, employment, civil or criminal law. In addition to the implementation of the committee the Sexual Harassment Act also obliges companies to provide a safe working environment and to display conspicuously at the workplace, the possible consequences of acts of harassment and the composition of the Internal Complaints Committee. Each company has to organize regular workshops and awareness programs to increase awareness amongst employees. Each employer must monitor the timely submission of reports by the committee. What are the sanctions for companies? The potential sanctions for companies are significant. If a company fails to constitute an Internal Complaints Committee or does not comply with any provisions of the Sexual Harassment Act, the company may receive a fine of INR 50,000 (approx. US$1,000). A repetition of the same offence could result in the punishment being doubled or even de-registration of the entity or revocation of any statutory business licenses.
Nicolai Behr is a compliance and dispute resolution attorney in Baker & McKenzie’s Munich office. He is a member of the steering committee of GlobalComplianceNews, a compliance news website with global reach moderated by Baker & McKenzie. He is a member of the committee "International" of the German Institute for Compliance. Dr. Behr is a regular speaker on compliance and white collar topics.