India recently enacted the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal Act) 2013, which protects all “aggrieved women” in the workplace from unlawful harassment.  To be clear, the term “aggrieved women” includes both employees and non-employees.  The Act represents a drastic shift in the law that will require all employers with a presence in India to implement the requisite policies and procedures outlined in the statute.

Internal Complaints Committee

The Act explicitly provides that employers must constitute an internal complaints committee (ICC) that will receive and investigate complaints of sexual harassment.  The ICC must be comprised of four or more members, at least half of which are women.  The presiding officer of the ICC must be a woman in a supervisory role with the employer.  The company must draft an order constituting the ICC and the procedures that will govern the ICC’s complaint receipt and investigation processes.

After the ICC receives a harassment complaint and completes its investigation, it will make a recommendation to the employer outlining the proper course of action to be taken in response to the complaint.  Recommendations within the ICC’s purview include issuance of a written warning, withholding of a promotion to the respondent, terminating the respondent’s employment, ordering training or counseling for the respondent and/or payment of damages to the aggrieved woman.

Written Policy, Notice Posting and Training

Under Rule 13(a), employers are required to formulate an internal policy for prohibition, prevention and redressal of sexual harassment at the workplace.  The policy should make it clear that sexual harassment is prohibited against any woman, whether or not she is employed by the company.  The policy should also include a non-exhaustive list of prohibited conduct, details about the company’s ICC, reporting and resolution procedures for complaints of sexual harassment, a policy against retaliation for complaints of prohibited conduct, the company’s planned course of conduct where penal action is necessary and other general policies and procedures.

In addition, Section 19 of the Act requires that the employer post a notice in the workplace that details the penal consequences of sexual harassment, as well as an order constituting the ICC.  As a practical matter, employers should physically post the notice in a conspicuous location and post the same notice on the company’s intranet.

Finally, employers are responsible for organizing sexual harassment compliance workshops and training programs at regular intervals for their employees.

Penalties and Damages

As discussed, the ICC can order an individual respondent to pay damages to the aggrieved woman where the ICC finds a violation of the Act.  The Act also specifies that an employer can be subjected to a fine of up to Rs 50,000 for violations of the Act.

Most importantly, a company may lose its license to conduct business in India for repeat violations of the Act.  Given the severity of this penalty, it is imperative that employers treat this new legislation seriously and take immediate steps to ensure compliance with the Act.