PoSH Act 2013 Case- Local Committee Orders Gurugram Start-Up Director To Pay Rs. 10.8 Lakh To Complainant- 10 Things We Can Learn From This Court Order
1. A Local Committee is akin to a Civil Court due to its powers under the Code of Civil Procedure, 1908 ( ref. PoSH Act 2013). While exercising these powers, the Local Committee of Gurugram ordered the Gurugram Start-up Travel agency Director to compensate the Complainant and tender an unconditional apology. It also ordered the immediate removal of the Director.
2. When the Sexual Harassment complaint is against an Employer, such as Director, CEO, MD, President, the Complainant needs to file the complaint with the Local Committee (LC) of that district. That does not mean, in the case mentioned above, the Complainant directly went to the LC. She had complained to the Supervisor, Department Head, and even the Chief Executive Officer, but to no avail.
3. This ‘knocking on doors’ by the Complainant brings us to a crucial point; If Sexual Harassment complaints are ignored or disregarded by the Employer, the severity of penalty and compensation to the Complainant goes up. Global Health Pvt Ltd vs Local Complaints Committee & ors (District Indore, 2017). In a well-known Sexual Harassment case of Global Health, (Medanta case), the Complainant had repeatedly complained to the MD, who had disregarded her complaints. Consequently, the Indore LC passed strictures against Medanta. Medanta appealed to the High Court, which condemned the MD’s behavior and ordered a hefty penalty. The High Court ordered Medanta to pay the Complainant 25 Lakh as compensation for the pain and loss of pay. And 50K for not constituting the Internal Committee.
4. We increasingly see a trend of higher penalties to corporates as precedents. In the Gurugram Start-up Director case, while passing the order to pay Rs 10.8 Lakh to the Complainant, the LC cited the IP Infusion Pvt. Ltd. case (2016-2017).
X vs IP Infusion Software India Pvt Ltd (2017)
The Labor Department (appellate authority) had ordered IP Infusion to withhold the Respondent’s increments and other benefits for three years. The labor commissioner had also ordered IP Infusion to pay a compensation of Rs. 50,000 for 60 months to the Complainant by deducting the amount from the Respondent’s salary. If Respondent left the organization, then IP Infusion would have to pay the compensation amount to the Complainant. He had also ordered IP Infusion to pay Rs. 4,80,000 to the Complainant for creating a hostile work environment. This was also inclusive of her salary arrears.
Global Health Pvt Ltd vs Local Complaints Committee & ors (District Indore, 2017)
In the Medanta case, the Madhya Pradesh High Court had ordered Medanta to pay the Complainant Rs. 25 Lakh as compensation for the pain, and salary arrears. The arrears are due to loss of pay incurred by her (as mentioned further above). The 25 Lakhs were inclusive of arrears since she had not been paid salary for 18 months.
5. When an organization having ten or more employees fails to constitute an IC as per the PoSH Act 2013 mandate, it has to bear a fine of Rs. 50,000. The LC or any appellate authority can order this fine. In the Gurugram Travel Agency case, Medanta, and many other infamous cases, one or the other authority has ordered this fine.
6. The LC also has the mandate to hear cases from companies which have not constituted an IC due to having less than ten employees. Even if a company has more than ten employees, the LC may hear a complaint if it has not constituted an IC. It may also redirect the complaint to the company with an order to constitute IC. The LC will also penalize the company Rs.50,000 for failing to follow the statute of constituting an IC. This clause is not direct learning from the case mentioned in the title of this blog. But it’s crucial to understand that failing to constitute IC can lead the Complainant to the LC. The LC will penalize the company for not constituting the IC. If it hears the case, it can also come down more heavily by ordering a hefty penalty to the Employer or the Respondent (compared to the penalties ICs generally mete out).
7. In the Gurugram Travel Agency case, the LC revealed that it had awarded the penalty (Rs. 10.8 Lakh) after referring to the IP Infusion case. This reference shows us that the LCs are aware and abreast of appellate authorities and High Court orders. Not only that, but they are also awarding substantial sentences to “serve as a reminder and deterrent to the Respondent (ref. Gurugram LC).”
Rainmaker Opinion: Contrary to views of some experts in this area, we believe compensation is mandatory under the PoSH Act. As with the LC, the IC also has a high discretion in deciding the compensation amount. We have seldom seen this amount being overruled by the appellate authority. Hence, we urge the ICs to exercise this mandate, though with much deliberation on the compensation amount.
8. The Courts take a severe view of the companies trying to drag a case to ‘tire out the complainant.’ Sometimes, the Respondents do this as well. In the case mentioned above, the counter-complaints were filed by Respondents (by the Director & the company) with the National Commission for Women, Police, and the LC too. Respondents filed allegations of ‘influencing witnesses and tampering evidence.’ In a 27-page order, the LC observed that these were delay tactics. (Delay tactics are usually employed in the form of victim-shaming and counter-blaming). The LC took cognisance of these delay tactics and took them into consideration while deciding the compensation amount.
9. The Respondents often allege a conspiracy theory by the Complainant. The Respondents in the Travel Agency case alleged that the Complainant had conspired with the witnesses since the company had earlier terminated them. They also alleged that she had tampered with the evidence and hence, leveled false charges. These counter-allegations could not stand the test of Court. The LC reasoned against the accusations, based on the witnesses’ testimonies and the Complainant’s statement’s reliability and consistency.
10. The Complainant’s consistency in the narration of events is crucial. The ICs and the LCs look for discrepancies in the statements, not only for Complainants but also for Respondents. In the Travel agency case, the Complainant’s steady, unwavering narration of events, the evidence, and the colleague’s testimonies led the LC to conclude that she is not making false allegations. The LC also dismissed the conspiracy theory stating the Complainant “came from a conservative family” and would not risk her image getting tarnished for her colleagues’ sake.
Rainmaker Opinion: While the above statement in itself is no testimony to anyone’s character, we believe that in the absence of a motive, there is no reason for the LC to believe that the Complainant would malign her reputation for the sake of colleagues.
The LC also noted that the Complainant never asked for any monetary compensation or a request to reinstate her colleagues.
Disclaimer: This blog uses the Gurugram travel agency case as a reference for demystifying the PoSH Act 2013 and elucidating how various courts are interpreting this law. This blog is not a synopsis of the entire case as Rainmaker could not access the LC Court Order. Hence, the author has had to rely on secondary sources of information for this blog.
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PoSH is ‘Prevention of Sexual Harassment’ at the Workplace. The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013 & Rules is popularly known as the PoSH Act 2013, or Sexual Harassment Act at Workplace.
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Author: Sumali Nagarajan
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