“Any organisation that does not have a sexual harassment committee will face serious legal action” – Maneka Gandhi, Union Minster of Woman and Child, 18 September, 2014

Sexual harassment in workplace is a sensitive issue, which has come into the forefront after a number of high profile sexual harassment cases involving top management of large corporate bodies like Tarun Tejpal of Tehelka and Phaneesh Murthy of iGate Corporation. India has recently enforced the new Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (hereinafter referred as the Sexual Harassment Prevention Act) from December, 2013 giving statutory rights to women employees to file complaints of sexual harassment at workplace.

The Oracle Corporation case – understanding employer’s failure to take reasonable steps to prevent sexual harassment

Recently, Oracle Corporation in Australia was ordered by the Full court of the Federal Court to pay $1,30,000 as compensation to the complainant in a sexual harassment case taking into account the “community expectation of higher value to compensation for pain and suffering and loss of enjoyment of life” of the complainant due to sexual harassment. In this case, the complainant (an employee of Oracle) was continuously harassed by another co-worker, who passed sexually suggestive remarks over a period of time. The court held Oracle vicariously liable for the act of its employee as it failed to take reasonable steps to prevent sexual harassment, mainly on two grounds:

i.     Failure of Oracle to provide adequate training to its employees. The training provided by the company was inadequate as it was found out that the company’s training module was a global training module which was not tailored to reflect the law in Australia. Moreover, the sexual harassment policy of Oracle at that point of time, was not in consonance with laws in Australia.

ii.     Improper and insensitive handling of the complaint and subsequent investigation by the HR of the company.

This judgment should be an eye opener for organisations who have not implemented the new sexual harassment law in their workplaces, as inappropriate sexual harassment awareness training might lead to potential lawsuits in the future.

Liability of employers under the 2013 Act

The Sexual Harassment Prevention Act creates certain statutory duties for the employers to following, including “providing a safe working environment at the workplace which shall include safety from the persons coming into contact at the workplace.” The new Sexual Harassment Prevention Act states that if the employer contravenes or abets contravention of any provision of the Act, which include providing a safe working environment or taking action against the harasser based on the report of the Internal Complaints Committee (ICC), it may be liable to pay a fine upto Rs 50,000. Interestingly, employer is defined as any person responsible for management, supervision and control of the workplace, so even in cases of violation of the statutory liability, the organisation itself will not be liable directly. However, repeated non-compliance can result in the punishment being doubled or even cancellation of the license by the government or local authority to carry on business, which might possess serious risk for businesses.Moreover, when complaints of sexual harassment are against the senior management of the company, it can lead to serious reputational risks for companies.

At the workplace, often demands for sexual favours (especially when it is by a senior management personnel) are coupled with promises of some kind of preferential treatment, or detrimental treatment in case the demand is not adhered to can constitute quid pro quo sexual harassment. Moreover, creation an intimidating, offensive or hostile work environment, or humiliating treatment which affects her health and safety are indicators that any unwelcome behavior, contact, advances or communication has caused sexual harassment to the woman. When the senior management of the company or the management has itself is involved in creation of a hostile work environment, the entire involved person will be individually liable under the law.

In cases, where the complaint is against the employer himself (which can include any person who is responsible for management, supervision and control of the company, or any board or committee responsible for formulation and administration of the policies of the organisation) the complainant can file a complaint with the Local Complaints Committee (LCC) established under the law. In such cases, the LCC may order the harasser employer (and not the business entity) to pay compensation to the complainant. The LCC while awarding the compensation may take into account the following things:

i.             the mental trauma, pain, suffering and emotional distress caused to the aggrieved woman;

ii.            the loss in the career opportunity due to the incident of sexual harassment;

iii.            medical expenses incurred by the victim for physical or psychiatric treatment;

iv.            the income and financial status of the respondent;

v.            feasibility of such payment in lump sum or in installments.

Takeaways

• All organisations should ideally have a written sexual harassment policy.
• Organisations should constantly check and update existing policies on sexual harassment based on the new Sexual Harassment Prevention Act, 2013. The policy should ideally be drafted or atleast vetted by a lawyer. The policy should ideally mention the following:

o   Sexual harassment in workplace is unlawful and prohibited under the law

o   Sexual harassment is prohibited in the organisation

o   A clear complaint filing mechanism

o   Consequences of engaging in sexual harassment

o   Clear reference to the applicable laws.

• If the organisation is a MNC, a global training module might not be adequate, it is essential to have a training module which complies with the applicable laws in India.
• All new employees should be made aware about the sexual harassment policy of the organisation during the induction program. Moreover, it is necessary to conduct periodical sexual harassment awareness workshops or training sessions.
• All managers and supervisors should be instructed to keep a vigil in the workplace and report any untoward incident to the management at the earliest.
• All complaints of sexual harassment should be treated carefully and with full seriousness by the management. It is essential to have people who are trained to handle such cases.

Are you compliant with the new sexual harassment law? If you have not complied with the law and looking for a solution? Visit http://sexualharassment.nujs.edu/ to find  out more about a course that helps in organizational compliance, ICC capacity-building and employee sensitization for 100 percent of the organization.