The Prevention of Sexual Harassment (POSH) at workplace Act -An overview

In today’s Topic I am going to write down about very serious topic for working women. Its an attempt make our professionals much more aware about the safety of woman at work place to give her safe working environment, I.e. to protect her from being harassed at work place.

I am forced to Pen Down this write up today because recent I came to know that one of my fellow faced some mental harassment just because she could not take action on the incident happened with her, So for you all who are engaged in any business entity may take benefit of it and also let others to get benefitted.

This Incident happened just after resume of business activity, post lockdown she joined office almost after 1 month and she asked for more leaves since she has small child at home whom she can’t sent to crèche etc. as per present scenario also due to work load at her place she couldn’t give her 100% at work . The organization where she were working for more than 2 years the employer on her request replied that “ instead of working from home you have done so much enjoy just look how much fatty you become”. & you are asking for much more leaves.

For some people this conversation might be very normal but for her it was a torture at front of office staff but She couldn’t take action as there was no internal complaint committee to report about this, Even though there Director’s Report had a clause regarding the same hopefully no other women would face such kind of mental harassment here we start discuss about the POSH Act.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act and the Rules (collectively known as POSH Laws) have been enacted and passed by the Ministry of Women and Child Welfare, in the year 2013. These laws are applicable upon every workplace, establishment, company, and organization, inclusive of MNCs, firms, shops, restaurants, etc.

LET’S FIRST START WITH THE APPLICABILITY OF THE ACT.

The Prevention of Sexual Harassment (POSH) at workplace Act is applicable to every workplace, establishment, company or organization employing 10 or more employees (full time, part time, interns or consultants included) irrespective of its location or nature of industry.

This is a pro tip for the professionals, Specially Company Secretaries if in your Organization No. of employees are more than 10 then implement the same today if not yet applied.

Non-compliance with POSH (Prevention of Sexual Harassment) can cost an employer a monetary penalty of INR 50,000. On repeated non-compliance, the employer may be penalized with twice the punishment. Non-compliance can also lead to cancellation of license, withdrawal or non-renewal of registration for carrying on business, by the Government or local authority.

t has been made mandatory to include a statement in the Director’s report that the company has complied with provisions relating to the constitution of the Internal Complaints Committee (ICC) under POSH laws.The Companies (Accounts) Rules, 2014 have been amended to mandate the disclosure regarding the implementation of the Sexual Harassment of Women at Workplace Act (POSH laws) in the Director's report of every company.

WHAT ARE THE COMPLIANCES UNDER THIS ACT ?

1. Committee: Each organization with more than 10 employees is required to form an Internal Complaints Committee headed by a “Female Presiding Officer”,

2. Policy: Formulation of an internal POSH policy for the prevention and redressal of sexual harassment at workplaces.

3. Workshops: Orientation and training programmes are also required to be carried out by the organization for awareness of this act. The notices need to be displayed in visible locations of the office so that they are accessible and visible to everyone i.e. employees, visitors, interns etc.

4. Annual Report: The organizations are also required to file an annual report with the information of the number of sexual harassment complaints received in a year, the number of complaints disposed of in a year, cases pending for more than 90 days, etc.

Reporting under Directors Report:

The Ministry of Corporate Affairs, through a Notification dated July 31, 2018, amended the Companies (Accounts) Rules 2014, in accordance with the request made by the Ministry of Women and Child Welfare.

By this amendment, it is now mandatory to disclose that the company has implemented the provisions of the Sexual Harassment Act.

It is now compulsory for a company to make a statement in the Director’s Report that it has complied with the provisions regarding the constitution of the Internal Complaints Committee (ICC).

This amendment comes as a major step towards making the workplaces in the private sector safer for women, thereby casting higher responsibility on the Board of Directors to ensure compliance under the POSH Laws. Penal provisions that ensue in case of non-disclosure under Section 134 of the Companies Act will now be levied in the matters of non-disclosure of the implementation of the Sexual Harassment Act as well.

INTERNAL CONTROL COMMITTEE:

Every employer is obliged to constitute an ICC through a written order. The ICC will be composed of the following members:

No	Member	Eligibility
1.	Chairperson	Women working at senior level as employee; if not available then nominated from other office/units/ department/ workplace of the same employer
2.	2 Members (minimum)	From amongst employees committed to the cause of women/ having legal knowledge/experience in social work
3.	External Member	From amongst NGO/associations committed to the cause of women or a person familiar with the issue of Sexual Harassment

SEXUAL HARASSMENT AT WORKPLACE POLICY

Employers/District Officers are responsible for complying with prohibition, prevention and redress of workplace sexual harassment. In practice, this means having a policy that:

(1) prohibits unwelcome behaviour that constitutes workplace sexual harassment;

(2) champions prevention of workplace sexual harassment through orientation, awareness and sensitization sessions; and

(3) provides a detailed framework for redress.

DISSEMINATION OF INFORMATION AND AWARENESS GENERATION

Employers/ District Officers have a legal responsibility to:

1. Effectively communicate a policy that prohibits unwelcome behaviour that constitutes workplace sexual harassment, and provides a detailed framework for prevention, and redress processes.

2. Carry out awareness and orientation for all employees.

3. Create forums for dialogue i.e. Panchayati Raj Institutions, Gram Sabhas, Women’s Groups, Urban Local Bodies or like bodies, as appropriate.

4. Ensure capacity and skill building of Complaints Committees.

5. Widely publicize names and contact details of Complaints Committee members.

ANNUAL REPORT:

As per Prevention of Sexual Harassment Act, 2013, there are 2 reports to be submitted by the employer:

1. It is the duty of the ICC to submit an annual report, which includes the number of cases filed/disposed of every calendar year to the employer and district office.

2. The employer has a statutory obligation to ensure this report is included in the annual report of the organization filed to the Registrar of companies.

DISQUALIFICATIONS OF MEMBERS

The POSH Act prescribes the following grounds which would disqualify a person from membership of the ICC:

1. Disclosure by the person of matters which are required to be kept confidential under the POSH Act, such as information regarding the complaint submitted to an ICC, identity of the complainant, the respondent or witnesses, details of inquiry proceedings and recommendations of the ICC, or action taken by the employer.
2. If the person has been convicted, or an inquiry is pending against such person, of any offence under any law.
3. Similarly, if the person has been found guilty, or an inquiry is pending against such person, with regard to any disciplinary proceedings.
4. Where the person has abused their position, rendering their continued membership in the ICC to be prejudicial to public interest.

On occurrence of any of the above grounds, the applicable member(s) would have to step down and be replaced with individuals possessing suitable qualifications as applicable to the relevant category of membership.

WHO IS A DISTRICT OFFICER (DO)?

State Governments will notify a District Magistrate/Additional District Magistrate/ Collector/ Deputy Collector as a District Officer at the local level. The District Officer will be responsible for carrying out the powers and functions under the Act at the district levels (including every block, taluka, tehsil, ward, and municipality).

PART-I

Section 21 – Internal Committee to submit annual report:

As per the Act – “(I) The Internal Committee or the Local Committee shall in each calendar year prepare, in such form and when may be prescribed, an annual report and submit the same to the employer and the District Officer.

PART-I

The District Officer will forward a brief report on the annual reports to the appropriate State Government. Such reports must include the following information:

1. No. of complaints received;

2. No. of complaints disposed of;

3. No. of cases pending for more than 90 days;

4. No. of workshops/awareness programmes carried out;

5. Nature of action taken by the employer/DO;

The Report of ICC will be forwarded to the DO through the employer.

Section 22 – Employer to include information in the Annual report

As per the Act – “The employer shall include in its report the number of cases filed, if any, and their disposal under this Act in the annual report of his organisation or where no such report is required to be prepared, intimate such number of cases, if any, to the District Officer.”

The latest Director’s Report submitted under the Companies Act has a section to capture the compliance to the PoSH Act, 2013. This report is filed along with the Annual returns to the Registrar of companies.

CONCLUSION

The POSH Act prescribes that failure by an employer to constitute an ICC is an offence punishable with fine for an amount of up to Rupees Fifty Thousand. Further, an employer convicted for the same offence at the second instance may be punishable with a fine for twice such amount, as well as be liable to cancellation or non-renewal of its business licenses, registrations or approvals by the government or local authorities.

(Author – CS Annu Sharma, is a Company Secretary  from Delhi and can be contacted at csannusharma123@gmail.com)

Discremination on Caste or a Domination of New Employee ?

An Employee: Mr. Akram was appointed in the month of February, 2020 as a CEO of an Organization dealing in traditional goods since an era, where the employee was a CFO at a very nominal pay having vast experience.

If I describe about the skill set of the employee, he was flooded with knowledge and has very technical approach to work, on the other side Organization was big enough in terms of market but not in terms of growth. Existing employees were too rigid to deal and having enough smartness to backbite each other with very political environment.

Gradually Mr. Akram were creating his pitch on the work and grasping everything quickly to gel up with everyone.

But other Co-workers having more than 7 years experience in the same organization did not like it and started jealous from him,  days were passing but after so much of hardwork  Mr. Akram was not being satisfied and he was also smelling the jealousy aroma in the organization.

One Day he visited the Plant of the organization and after audit he ask the supervisor to certify the audit done by him but the supervisor who is very old and having traditional approach denied that he never certify this and he won’t do the same now as well.

Another day, The office boy named as ram came to Mr. Akram to sign some petty cash bill so that the office boy can get his reimbursement, Mr. Akram asked some details about the bills of Xerox, Stationary and other food item but instead of co-operating that office boy shouted and took back the receipts and said I never clarify such details don’t sign I ll get them signed from the other seniors.

Same Day he asked his junior accountant some details about the reports he prepared frequently but those details were found incomplete by the owner of the company therefore he advised the junior accountant to prepare them in apt manner so the report could be found useful but the same thing happened the Junior Akash so rigidly replied: that I always send the reports like this and I won’t change or comment on that as I have so much work to do and it’s not my responsibility to remark them , Go and complain about me if you wish to do the same.

People around were just gossiping that all these Mohammed’s are same and this Akram why he being so bossy to us, now he will teach us how to work? Oh he won’t stay much in the organization.  

Now Akram is thinking that why all of them have so rigid nature and none of them is techno friendly and don’t want to move towards improvement in their traditional approach. Next Day he remains absent from the office and again people were gossiping about them and just being rigid on the same pace.

What I found and observe when people don’t want to be change or don’t want come out from their comfort Zone they just Gossip and remove the reason for Change. Its all what I learn from this short story with some big logics behind.

Thanks and Regards

CS Annu Sharma

Drop Mail or Msg if you want to share your problems connecting to the same : csannusharma123@gmail.com    +91-7021848742

   

SEBI wants to make auditor resignation more transparent for listed companies.

In recent times, SEBI wants to ensure auditors act responsibly and their resignation does not hurt investor sentiment therefore SEBI has sought public comments on the proposals till 8 August. The role of the audit committee and disclosures to investors must be strengthened to ensure that statutory auditors act more responsibly and resign only on genuine grounds without hurting investor sentiment

There have been a significant number of instances of abrupt resignation of Statutory Auditors from listed entities in recent times. In most of the cases, the statutory auditors have suddenly resigned without completing their assignments for the year, generally citing ‘pre-occupation’ as the reason for resignation.

These policy proposals focus primarily on the following two aspects with respect to resignation of auditors:

1. Strengthening disclosures to investors

a. Conditions Prior to Resignation – Annexure A

b. Specific Format prescribed for Resignation – Annexure B

c. The listed entity shall ensure disclosure the aforesaid resignation letter to the stock exchanges. In case of resignation by the auditor of a material unlisted subsidiary, the subsidiary shall disclose the resignation letter to the listed entity which shall, in turn, disclose the same to the stock exchanges.

d. Disclosure of views of Audit Committee and the Board of Directors- It is proposed that the views of the Audit Committee and the Board of  Directors (of the listed entity/ unlisted material subsidiary, as applicable) be required to be submitted to the stock exchanges along with the disclosure of the resignation letter of the auditor in the aforesaid prescribed format.

2. Role of the Audit Committee

In order to strengthen the role of the Audit Committee in the matter, it is proposed to issue a circular/amend SEBI LODR Regulations, specifying the following as the procedure that may be followed in such cases

a. The auditor shall approach the Chairman of the Audit Committee directly and immediately in case of any concerns with the management such as non-availability of information / any non-co operation by the management. The auditor shall not specifically wait for the quarterly meetings to take place in order to raising such concerns.

b. The auditor shall bring to the Audit Committee’s notice, all the concerns the auditor has with respect to such resignation, along with relevant documents. In cases where the resignation is due to non receipt of information / explanation from the company, the auditor shall enlighten the Audit Committee of the details of information / explanation sought and not provided by the management, as applicable.

c. The Audit Committee shall deliberate on the matter and communicate its views to the management and the auditor. In communicating its views, the Audit Committee shall ensure that it fulfils its role as specified under the SEBI LODR Regulations. The listed entity shall ensure the disclosure of the Audit Committee’s views to the Stock Exchanges.

The auditor shall not specifically wait for the quarterly meetings to take place in order to raising such concerns. The auditor shall bring to the audit committee’s notice, all the concerns the auditor has with respect to such resignation, along with relevant documents.

Annexure – A :  Conditions Prior to Resignation

Current Provisions under the Companies Act 2013 Under Sec 140(2) of the Companies Act, 2013, the auditor who has resigned from the company is required to file a statement in the prescribed form with the company and the Registrar ((i.e. ADT-3) within 30 days from the date of resignation.

The reasons for resignation are also required to be disclosed in the prescribed form for resignation which is required to be filed by the auditor under the Companies (Audit and Auditors) Rules, 2014.

Current Provision under the SEBI LODR Regulation, Based on the recommendations of the Kotak Committee, amendments have been made to SEBI LODR Regulations.

Under regulation 30 the listed entities are required to disclose to the stock exchanges, the detailed reasons for the resignation of auditor, as given by the auditor, within 24 hours. These amendments are effective from April 1, 2019

Under SEBI (LODR) Schedule III, Part A, Quoted

A. “Events which shall be disclosed without any application of the guidelines for materiality as specified in sub-regulation (4) of regulation (30):

 In case of resignation of the auditor of the listed entity, detailed reasons for resignation of auditor, as given by the said auditor, shall be disclosed by the listed entities to the stock exchanges as soon as possible but not later than twenty four hours of receipt of such reasons from the auditor”.

Proposed amended provision in SEBI LODR Regulations.Insertion of sub-regulation 33(9) ;

Conditions prior to resignation: 33(9): If the auditor of a listed entity/ material unlisted subsidiary of the listed entity proposes to resign:

a. With respect to auditor of a listed entity

i. If the auditor has signed the audit report for all the quarters (limited review/ audit) of a financial year, except the last quarter, then the auditor shall finalize the audit report for the said financial year before such resignation.

ii. In all other cases, the auditor shall issue limited review/audit report for that quarter before such resignation (i.e. previous quarter in reference to the date of resignation).

b.  With respect to the auditor of a material unlisted subsidiary of the listed entity, the auditor shall issue the limited review/audit report for that financial year/ quarter, as applicable, before such resignation (i.e. previous financial year/ quarter in reference to the date of resignation).

c.  If any information is not provided to the auditor, to that extent, the auditor shall provide an appropriate disclaimer in the audit report.

Explanation: The disclaimer as specified in this clause may be in accordance with the Standards of Auditing as specified by ICAI.

Annexure – B : Format of resignation letter by a statutory auditor

1. Name of the listed entity/ material unlisted subsidiary:

2. Details of the statutory auditor:

a. Name:

b. Address:

c. Phone number:

d. Email:

3. Details of association with the listed entity/ material unlisted subsidiary:

a. Date on which the statutory auditor was appointed:

b. Date of which the term of the statutory auditor was scheduled to expire:

4. Detailed reasons for resignation:

5. In case of any concerns, efforts made by the auditor prior to resignation (including approaching the Audit Committee):

6. In case the information requested by the auditor was not provided, then following shall be disclosed.

a. Whether the inability to obtain sufficient appropriate audit evidence was due to a management-imposed limitation or circumstances beyond the control of the management.

b. Whether the lack of information would have significant impact on the financial statements/results.

c. Whether the auditor could have performed alternative procedures to obtain appropriate evidence for the purposes of audit/limited review

d. Whether the auditor communicated the matter to the Audit committee before resignation

e. Whether the lack of information was prevalent in the previous reported financial statements/results. If yes, on what basis the previous audit/limited review reports were issued.

f. Prior to resignation, the extent of audit/limited review work performed by the auditor.

Any other facts relevant to the resignation:

Declaration

1. I/ We hereby confirm that the information given in this letter and its attachments is correct and complete.

2. I/ We hereby confirm that there is no other material reason other than those provided above for my resignation/ resignation of my firm.

Signature of the authorized signatory

Date:

Place:

Encl:

AT THE END:  The proposed guidelines indicate that such cases would be scrutinized more closely by regulators and will require significantly enhanced disclosures to the investors,

CS Annu Sharma is a Commerce Graduate and an Associate Member of the Institute of Company Secretaries of India (ICSI). She has cumulative experience of more than 3 years with Listed Company, CA and CS firms. She authored various articles on the topics of Corporate Laws, Securities Laws, DGFT, Income Tax, Start-ups among other. Articles authored by her are published on prominent Professional Websites.  

(Author be Contacted at csannusharma123@gmail.com & +91-7021848742 : CS Annu Sharma for any discrepancy.)