Decade Of The POSH Law: Analysis Of Reporting Trends And Low Compliance

Sexual harassment not only violates one's respect and dignity but it also results in infringement of fundamental rights as guaranteed under the Constitution of India.

Under Section 2 of the POSH Act, the term 'Employer' has been defined meaning any person responsible for the management, supervision and control of the workplace.

Further Chapter VI, Section 19 of the POSH Act imposes certain obligations on the Employer in the form of compliances that are required to be implemented in order to give effect to the provisions of the Act, as well as to avoid penalties under the law.

One of the compliance being, monitoring the timely submission of Annual Report by the Internal Committee.

In accordance with the provision of Section 21 of the POSH Act, it is mandatory for the Internal Committee to prepare an Annual Report and submit the same to the Employer and the District Officer. However, Rule 14 of the POSH Rules read with Section 21 of the POSH Act, requires some specific information/data to be disclosed in the Annual Report.

This mandatory disclosure of data is vital for legal compliance, organizational transparency and fostering a safe and respectful work environment. It underscores the organization's commitment to addressing and mitigating sexual harassment and helps in analyzing trends and identify areas for improvement.

Trend in reporting sexual harassment complaints: Study

The POSH Act has been in effect for over a decade now but yet there remains a significant gap in publicly accessible data that consolidates information across employers and companies. The existing data remains scattered across individual company reports, often in formats that are not user friendly, making it challenging to identify industry-wide trends and patterns in the reporting and resolution of sexual harassment cases.

Recently, Ashoka Univeristy's Centre for Economic Data and Analysis has released a comprehensive report on the basis of data from 300 companies listed on the National Stock Exchange (NSE) to identify broad trends on the evolving dynamics of workplace sexual harassment complaints . The data for this analysis was collected from disclosures made by companies in their annual and business responsibility reports. It spans an 11-year period from the financial year 2012-13, a year before the POSH Act was implemented, to financial year 2022-23, the latest year for which comprehensive data is available.

Increase in Reported Cases:

The study reveals that over this period, there has been a noticeable increase in the number of cases reported under the posh Act within India. This suggests growing awareness and willingness to report incidents, but also highlights the persistent issue of sexual harassment in the workplace.

• In FY 2012-13, for example, 71 cases were reported by 12 companies.
• In FY 2013-14, the first year when the POSH Act came into force, the companies in focus together reported 161 cases. Within a year, this number jumped to 465.
• The numbers grew in each subsequent year till FY 20-21, the first year of the COVID-19 pandemic. A total of 586 cases were reported across the 300 companies, as reported to 961 cases a year ago.
• This number increased to 767 in FY 2021-22, and then jumped by 51.2% in the subsequent year to 1160.

Discrepancy between Reported and Resolved Cases:

While the number of complaints has increased the resolution rate has not kept pace. This discrepancy indicates potential delays and inefficiencies in redressal mechanisms to address and deal with complaints of sexual harassment, leading to backlog of pending cases.

The study reveals that number of pending cases for these companies has also been growing over the years.

• In FY 2013-14 109 complaints of sexual harassment were resolved across these companies. This jumped to 406 in FY 2014-15.
• However, over the years, the number of resolved cases has mostly trailed the number of complaints. In FY 2016-17, even as the number of reported cases saw a 12.9% increase vis-à-vis the previous year, 2.1% fewer complaints were resolved as compared to a year ago.
• Similarly, while the number of complaints has seen a surge post FY 202-21, the number of resolved cases has trailed significantly.

.Interestingly, the number of pending cases might appear smaller, the larger gap between reported and resolved cases suggests complexities within the resolution process.

Factors that may contribute to low resolution rates includes:

• Withdrawal of complaints: One primary reason for this gap is the withdrawal of complaints by the complainants. In some instances, individuals may choose to withdraw their complaints due to personal or professional reasons. This could include fear of victimization or backlash, lack of evidence to support the claim, external pressures, or may be due to concerns of social sanction and stigma.
• Departure from company: Another significant factor is the departure of either the complainant or the accused from the company before the case is resolved. When one of the parties involved leaves the organisation before the investigation concludes, it often complicates the investigation process and in such cases the case might remain unresolved adding to the backlog.
• Ineffective Redressal Mechanism: Organisations lacking robust Complaints Committee and with inadequate grievance redressal mechanism often struggle to handle matters pertaining to sexual harassment efficiently, thereby, leading to higher discrepancies between reported and resolved cases.
• Workplace Culture: Organisations with a toxic work culture or poor leadership may have a significant gap between reported and resolved cases. That is to say, a culture that discourages reporting or does not prioritize addressing grievances may contribute to higher unresolved case rates.

To reduce this gap between reported and resolved cases, it is crucial that organisations focus on several key areas including enhancing reporting mechanisms, allocating adequate resources, streamlining processes and fostering a positive culture.

Reporting Gaps:

A striking finding of this study is that the bulk of sexual harassment cases are merely reported by a small share of companies.

For instance, the 1160 cases reported in FY 22-23 were across just 81 companies of the 300 companies in the data set. That is to say, 219 companies did not report any case under the POSH Act that year.

This trend was not just specific to FY 22-23. Right from FY 2013-14, only a handful of companies have been reporting complaints under the POSH Act.

Moreover, it has been observed that majority of companies have been reporting zero complaints, often for multiple years.

At first glance, this might be a positive sign of a safe and respectful workplace, implying effective policies, a strong ethical culture and proactive measures to prevent inappropriate behavior. However, despite the apparent positive connotation, these consistently reporting of zero complaints over extended periods must be interpreted with caution, raising questions about the underlying dynamics and the true state of organizational culture, such as:

• Employees might not have trust in the company's reporting mechanisms;
• Employees might fear of retaliation. Retaliation, in various forms, looms as a potent threat for those contemplating reporting instances of sexual harassment. Victims often grapple with the fear of losing their jobs, withholding of promotion, facing social stigma or encountering hostility from the organization colleagues and superiors.

For instance, if employees believe that reporting of sexual harassment will lead to negative consequences for their professional career, they are less likely to come forward.

The EY Report of 2017 revealed that

“Women tend to not report harassment in the workplace because of fear of retaliation by the harasser or organization.

Some of the other reasons why women stay away from officially complaining about harassment include, social stigma, self-judgment, lack of faith in the system and lack of understanding of the law.”

• Another factor may be inadequate awareness and trainings. Employees might not be aware of what constitutes sexual harassment or how to report it, all these may further lead to underreporting.
• Further, social norms and fear of victimization might also discourage employees from reporting sexual harassment, particularly in cases where there is gender biases or difference in power dynamics between the complainant and the accused.

At first glance, this might seem like a good thing. However, the authors of the study point out “that the low numbers reported by several companies should serve as a note of caution, and not necessarily one to take heart from. It is likely that several companies in our dataset have not made sufficient efforts in complying with the requirements of the POSH Act. In the same vein, companies that have consistently reported complaints across the years may not necessarily be the only ones where such incidents are happening, but could possibly be also those that have more awareness and better reporting mechanisms.”

Moreover, some companies have even failed to report any numbers in their annual reports, despite this being a mandatory legal compliance. This non-compliance persists even though companies have faced financial liabilities for failing to adhere to these disclosure requirements.

“It was likely that several companies had not made sufficient effort to comply with the Act. The fact that many of the companies have not even made the mandatory disclosures in their annual reports for multiple years is an ample indication of that.”

While the increase in reported cases under the POSH Act is a sign of progress the significant gaps in compliance and the growing number of pending cases indicate that much work needs to be done.

The current state of data fragmentation highlights the need for a robust, centralized approach to data collection and reporting under the POSH Act. Such a move would not only ensure better compliance but also aid in fostering a safer and more respectful environment across all industries.

Authors: Vikrant Rana (Managing Partner) Anuradha Gandhi (Managing Associate) And Isha Sharma (Associate) At S.S. Rana & Co. Views are personal.