The past two years have witnessed an increased awareness regarding sexual harassment of women at the workplace throughout the world. The #MeToo movement has compelled organizations to reconsider their HR practices to ensure the establishment of adequate safeguards for prevention of any form of sexual harassment at the workplace and effective redressal mechanisms. 

Given the nature of the contractual relationship of a hotel owner (Owner) and a hotel operator (Operator), a common point of contention on hotel management contract negotiations is the responsibility for compliance with laws. Considering that the hotel employees are hired and trained by the Operator, the Owner usually expects the Operator to undertake the obligation of complying with the law. Interestingly, however, although policies are often set by the Operators, contractually the onus is placed on the Owner and the purported position of the Operator as a mere service provider does not admit to a clear legal obligation for compliance with various employment legislation.

Who is responsible?

Under a hotel management agreement (HMA), more often than not, hotel employees are designated as employees of the Owner. This is despite the fact that the Owner has little or no control in matters relating to employees. Customarily, it is usually the Operator who selects and hires, exercises day-to-day supervision and control over the employees and formulates the HR policies and guidelines The Owner often has no say in disciplinary actions or dismissal of employees. Given this typical arrangement, the question that needs to be addressed then is who is responsible under the law for prevention of sexual harassment- the Owner or the Operator?

A few years ago, the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (Act) was formulated by the Indian Government. The Act requires an ‘employer’ to take certain prescribed actions for prevention of sexual harassment at the workplace and is inter alia applicable to a private unit or undertaking carrying on any commercial activities, including provision of any services. 

An employer has been, defined under the Act to mean, any person responsible for the management, supervision and control of the workplace. Persons discharging contractual obligations with respect to his or her employees could also be considered within the ambit of an ‘employer’. 

Taking into consideration, the definition of an ‘employer’ under the Act it may be contended that both the Operator and the Owner can be considered as an ‘employer’ for the purposes of the Act. Whilst the Operator is responsible for the management, supervision and control of the workplace, the Owner is liable under the HMA to discharge obligations towards its employees. 

Actions to be taken

Most Operators have anti-sexual harassment policies in place across the brand which they usually extend to the employees of hotels in which they provide their services. Operators also typically undertake the onus of constituting the Internal Complaints Committee (ICC) as required under the Act for addressing complaints of sexual harassment. However, they are wary of undertaking any liability for non-compliance of statutory provisions. Given that the Operator is in-charge of the hotel employees and formulates policies in respect of such employees, it may be deduced that the Operator is responsible for compliance of the Act by inter alia undertaking the following actions: (i) organizing workshops and awareness programs at frequent intervals for sensitising the employees, (ii) organizing orientation programs for members of the ICC, (iii) assisting aggrieved women in filing complaints, and (iv) monitoring timely submission of reports by the ICC. The Operator may also be required to ensure that the order constituting the ICC and the consequences of sexual harassment are displayed at a conspicuous place in the workplace. The Operator may additionally have to undertake investigation of the complaints and the witness statements to examine the accuracy of the claims and information provided. At times this could entail forensic examination of electronic data, footprints and records available through mobile devices and laptops to gather and preserve electronic evidence.

Considering that the Owner may also be construed as an employer, the Owner should ensure that all of the aforesaid actions are undertaken by itself or the Operator. Usually, Owner’s expect the Operator to only formulate a policy for the prevention of sexual harassment, constitute the ICC and inform them regarding any complaints received by or against any employees. However, it is time, that this obligation be extended beyond that. Owners may consider monitoring compliance of the Act by seeking the requisite details in the MIS reports provided by the Operator.

Safety to be of prime importance

Regardless of who takes on the responsibility over the hotel employees or of complying with the Act, it is important to not overlook the main objective. The hospitality industry is an industry with a high level of human interaction. Harassment in such an industry is not just limited to that inter se the employees but may also extend to cases amongst guests and employees. It may be noted that the Act covers acts of sexual harassment not only of employees but any persons at the workplace. Operators may need to be mindful of the fact that even though they may disclaim liability for any non-compliance or violation of the Act by the hotel employees, a reported case of sexual harassment can be catastrophic for the brand image. 

The importance of taking stock and necessary measures to address sexual harassment at the workplace cannot be emphasized enough- whosoever’s cross it may be to bear- the Owners’ or the Operators’ - ultimately the hospitality industry is all about it's all about people.