Article: Legal HR: Can Promoter-CEO be part of the ICC under POSH Act?

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Legal HR: Can Promoter-CEO be part of the ICC under POSH Act?

There are concerns when Internal Complaints Commitee has a promoter-CEO as a member of the committee. So let's hear from the legal experts on the Pros and Cons of such a step.
Legal HR: Can Promoter-CEO be part of the ICC under POSH Act?

Workplaces, globally, have witnessed an increasing number of women employees coming forward with complaints of sexual harassment at the workplace1. To address such concerns, India had come up with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (PoSH Act). One of the requirements under the Act is that every employer (with 10 or more employees) shall have an Internal Complaints Committee (ICC) to enquire into sexual harassment complaints2. The PoSH Act also prescribes who can be the members of such committees3.  One question that comes up often in discussions with clients is whether it is desirable or fair to have a promoter-CEO of the company as a member of the ICC or not. 

What the Law says

Firstly, to place any doubts to rest, there is no specific prohibition under the Indian law for promoter-CEO from becoming a member of the ICC. The promoter-CEO can be one of the two members from amongst the employees provided he/she is committed to the cause of the women4. There are no guidelines prescribed in the law or by the government as to what is meant by “committed to the cause of women”. Regardless, it does not bar the promoter-CEO to be in the ICC for they may very well be perceived to be committed to the cause of women.

PoSH Act prescribes the following composition* for the ICC: 

  • A presiding officer, who shall be a woman employed at a senior level;
  • Not less than 2 (two) members who are employees who are committed to the cause of women;
  • One external member
  • NGO member committed to the cause of women
  • A person familiar with labour, service, civil or criminal law
  • At least one half (>50%) of the members shall be women, at all times

*The nominations shall be for a period of upto 3 years. 

Concerns

 But there are concerns when ICC has a promoter-CEO as a member of the committee. 

Conflict of interest: It goes without saying, specifically in the backdrop and context of Indian promoter-driven companies, that it is the promoter-CEO who remains the face of the company. As a result, with the promoter at the helm of the affairs - any reputational exposure stands amplified. Corollary to this, incentives to suppress any such event which might cause reputational damage to the company by way of sexual harassment allegations is also higher.

Hostile work environment: In a situation where the promoter himself is a perpetrator or an active participant in promoting the culture of misogyny and sexism at workplace, it may also create a hostile work environment.

It is imperative to note that involvement of a key managerial person or promoter in an act of sexual harassment, is an expression of abuse of power and domination over the victim.  

The other side

While there is no denying the merit from the other arguments, there are compelling reasons at the same time to include the promoter-CEO as the member of the ICC. 

Higher accountability: The very fact that the promoter-CEO is the person who owns and runs the company and he does not want to bring in any kind of disrepute to the company will motivate him/her to effectively address the concern raised by the potential victims of sexual harassment. It is because the cost of ignoring the sexual harassment, in the present time, is much more than the transient cost of a sexual harassment complaint in his/her corporate establishment. 

Leadership by example: Having a senior member of the organization take the lead on matters such as prevention of sexual harassment can ensure an effective and responsive redressal system of the company towards the concerns of women. Such effective redressal system would also reflect adherence to principles of good governance.

Impartiality: As a matter of fact, inducting the head of an organization in the ICC will send a strong signal amongst the stakeholders on the organization’s stance against sexual harassment. 

Conclusion

In light of the above arguments and counter-arguments, it can’t be said that it would be unfair to have a promoter-CEO as a member of the ICC. However, it is advisable that suitable safeguards and internal checks and balances are also introduced in relevant organizational policy against sexual harassment of women at the workplace to foster a safe environment for the women to speak out against any kind of sexual harassment without any fear of retaliation or sanctions. An important aspect here is to ensure that in the event of any allegation of sexual harassment against the promoter-CEO, he/she should be required to step down from the ICC with immediate effect. 

References: 
1https://thewire.in/120506/lets-not-buy-tvf-selling-skin-deep-feminism/;  https://thewire.in/134400/fssai-sexual-harassment/; https://www.dailyo.in/variety/sexual-harassment-scoopwhoop-suparn-pandey-tvf-arunabh/story/1/16652.html. 
2See Section 4 of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.  
3Please refer to Section 4(2) of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.  
4Id. 

Topics: Legal & Compliance Outsourcing

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