The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ('Act') and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013 ('Rules') were enacted on 9 December 2013 with the objective of preventing and protecting women against sexual harassment at workplace. Keeping with its objective, the Act and the Rules provide a mechanism for the effective and speedy redressal of complaints of sexual harassment.

Prior to the enactment of the Act, the Vishakha Guidelines laid down by the Supreme Court of India in Vishakha v State of Rajasthan[[1]] governed the mechanism for resolution of complaints received by the complaints committee of any organisation. The Act which superseded the Vishakha Guidelines now requires an employer to constitute an Internal Complaints Committee ('ICC'), at each office or branch of an organisation employing more than 10 employees. The Act envisages constitution of an ICC for receiving complaints of sexual harassment and redressal thereof.

The constitution of an ICC has been dealt under §4 of the Act, which is a mandatory provision. The non-constitution of an ICC in the quorum prescribed, attracts a penalty, including imposition of a fine upto Rs. 50,000 and twice the amount of fine for repetition of the same offence. Further, the Act provides for withdrawal, non-renewal or cancellation of business licences, as the case may be, in case of repeated non-compliance.

On 31 July 2018, the Ministry of Corporate Affairs has notified the Companies (Accounts) Amendment Rules 2018 ('Companies Rules') under §134 of the Companies Act 2013 ('Companies Act'), amending the Companies (Accounts) Rules, 2014. The Companies Rules have inter alia amended Rule 8 which enumerates the 'Matters to be included in Board's report', to include Clause (x). Clause (x) of the Companies Rules now requires every Company to report compliance with the Act, i.e., constitution of an ICC. Rule 8 Clause (x) of the Companies Rules reads as follows:

"A statement that the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013."

The amendment was brought pursuant to the efforts of the Ministry of Child and Women Development, which made a request to the Ministry of Corporate Affairs to mandate the disclosure of implementation of the Act.

The introduction of Clause (x) now casts a responsibility on the respective Companies to report on implementation of the Act. The non-compliance with the reporting requirements under §134 of the Companies Act could lead to imposition of a fine on the Company which is not less than Rs. 50,000 but which may extend to Rs. 25 Lakhs and imprisonment of every officer of the Company for a term which may extend to 3 years or fine in the range of Rs. 50,000 to Rs. 5 Lakhs.

Conclusion:

The Act and the Rules were enacted in 2013, however, the statistics for compliance with the Act continue to remain on the lower side. The amendment is a positive step aimed at achieving higher compliance amongst the private sector, which as of date remains low and is surely a welcome measure.


[1] AIR 1997 SC 3011


For further information on this topic please contact Tuli & Co 

Tel +91 11 4593 4000, fax +91 11 4593 4001 or email lawyers@tuli.biz

www.tuli.biz

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.