Is POSH compliance legally necessary?

POSH is an abbreviation for Prevention of Sexual Harassment. The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act was introduced with an objective to provide protection against sexual harassment of women at workplace.

POSH Laws apply to every employer whether an individual, partnership or a company. Therefore, every organization, be it Public Limited Company, Private Limited Company, Limited Liability Partnership, Partnership Firms, Association, Society, Trust, Proprietorship or even an NGO, irrespective of its size and number of the employees, has to comply with the laws enshrined in the Act.
 

Non- Compliance with the POSH laws

Non-compliance with POSH (Prevention of Sexual Harassment) can cost an employer a monetary penalty of INR 50,000. On repeated non-compliance, the employer may be penalized with twice the punishment. Non-compliance can also lead to cancellation of license, withdrawal or non-renewal of registration for carrying on business, by the Government or local authority.

There have been many instances where the employers have been charged with monetary penalties more than just Rs.50,000  where the female employees have approached the courts for sexual harassment cases at workplace. Non-compliance with POSH can cost the employer exemplary damages imposed by the courts. This may also harm the reputation of the company and create a hostile work environment.

It has been made mandatory to include a statement in the Director’s report that the company has complied with provisions relating to the constitution of the Internal Complaints Committee (ICC) under POSH laws.The Companies (Accounts) Rules, 2014 have been amended to mandate the disclosure regarding the implementation of the Sexual Harassment of Women at Workplace Act (POSH laws) in the Director's report of every company.

For reference, the official gazette published by the Ministry of Corporate Affairs that states the amendment made to the Companies rules with regard to POSH laws is linked below: 
http://www.mca.gov.in/Ministry/pdf/companisAccountsRules_31072018.pdf 

What does it take to be POSH compliant?

To be POSH compliant, an employer has various obligations to fulfill in ensuring that working women do not face sexual harassment at the workplace. Here are methods to ensure that your organization is fully compliant with the POSH laws:
 

Constituting a separate committee for redressal of complaints

It is mandatory for every organization employing more than ten people to constitute an Internal Complaints Committee (ICC) to address and redress complaints of sexual harassment.

Internal Complaints Committee has to be constituted at each office or branch of the organization that employs at least 10 employees. Further, according to the law, all organizations having 10 or more employees are required to constitute an ICC, even if they do not have any women employees.

Compliance with POSH laws is highly important because the law also allows third parties like contractors, customers etc., who are visiting the premises of the organization, to file a complaint of sexual harassment that took place at the workplace.

If a workplace has less than 10 employees, then it need not form an ICC.  All complaints , in this case,will go to the local complaints committee set up as per the Act by district officers of each district.

In organisations that have less than 10 employees, complaints of sexual harassment must be made to the Local Complaints Committee (LCC) that the district magistrate or the district collector may have set up at each district level.
 

Creating awareness about the POSH laws

The employer shall hold workshops, seminars, and orientations for its employees to ensure proper awareness about the POSH laws and the process for complaint resolution under the ICC.

Another important mandate for the employers is to adequately display notices at the workplace about the penal consequences of indulging in sexual harassment, information about the ICC composition and its members.
 

Drafting a POSH Policy

The law mandates that every company must have a POSH policy i.e. an anti-sexual harassment police for prohibition, prevention, and redressal of sexual harassment at the workplace and to promote gender-sensitive safe spaces and remove underlying factors that contribute towards a hostile work environment against women. You can take help of a lawyer to draft a POSH policy for your company.
 

Changes in the Employment contracts

Drafting a policy complying with the POSH laws is not enough; an employer under the anti-sexual harassment laws is required to treat any instances of sexual harassment as misconduct under the rules of employment.
 
It is important to introduce a specific clause in the employment agreement, standing orders or the service rules of a workplace stating that sexual harassment will be considered as misconduct along with the repercussions which could include deduction of wages, termination of employment etc.
 

Annual Report on POSH Compliance

An annual report has to be filed by the Internal Complaints Committee (in case of more than 10 employees) or the Local Complaints Committee (in case of fewer than 10 employees) stating the company’s POSH compliance, i.e. the number of cases filed; their disposal and investigations etc. each calendar year and submit the same to the District officer under the supervision of the employer.

In cases where the annual report is not required to be filed, the employer is responsible to communicate the total number of harassment cases filed in a year to the District Officer.