A decade of the POSH Act: BY Akshi Chawla, CEDA
A decade of the POSH Act: What the data tells us about how India Inc., has fared
Akshi Chawla Director, CEDA
The number of cases being reported by India Inc. has increased over the years. However, most cases are being reported by a small set of companies, raising concerns of possibly poor awareness and compliance at large
Key highlights
- There has been an increase in the number
of cases of sexual harassment reported by Indian companies in their annual
reports over the past decade
- The number of complaints have been
growing faster than the number of complaints that have been resolved
- However, only a fraction of companies
have been reporting cases, while several companies have been reporting
zero cases, often for multiple years
- Nearly all the cases that have been
reported have been reported in larger companies (ranked in the top 100 on
the National Stock Exchange). Medium and smaller companies report almost a
negligible share of cases
- Higher number of cases could reflect
higher incidence as well as higher awareness and better redressal
mechanisms
- Consolidating data scattered across
company reports can enable more effective tracking of compliance and early
detection of gaps
Safe workspaces free of harassment, bullying
and abuse are necessary for workers to be able to work with dignity. Sexual
harassment at the workplace is a serious violation of dignity and fundamental
rights, and for women who already face a multitude of barriers that prevent
them from participating in the economy on an equal footing, poses a severe
obstruction to their ability to participate in the workforce.
In February 2013, the Indian Parliament passed
the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 (POSH Act in short), marking an important milestone for women’s
right to safety and equal participation in the workforce. The act, which came
into effect on Dec 09, 2013, seeks to protect women from sexual harassment at
the workplace, and provides for grievance and redressal mechanisms in case any
such incident takes place.
The POSH Act lists down the duties of
employers in this context, including disclosure of data on complaints in their annual reports. Additionally, in 2018 the
Securities and Exchange Board of India (SEBI) mandated all
listed companies to disclose data on cases of sexual harassment in their annual
reports each year.
This mandatory disclosure of data related to
the implementation of the act is a valuable inclusion in the law. It can serve
as an important accountability measure, and also enable effective tracking of
how the law has fared. However, more than a decade down the line, we do not
have any publicly available repository collating data across employers and
companies. The data remains scattered across individual company reports, often
in difficult-to-use formats, making it challenging to identify industry-wide
trends and patterns.
For this analysis, we compile data for a
select sample of listed companies for ten years to identify broad trends and
patterns. We find a growth in the number of cases being reported by India Inc.
over the years. However, most of these cases continue to be reported by only a
small number of companies, raising concerns of possibly poor awareness and
compliance at large.
Methodology
This analysis is based on data for 300 listed
companies on the National Stock Exchange (NSE). The NSE is one of India’s
premier stock exchanges. As of Mar 31, 2023, 2,137 companies were listed on the
exchange but 124 were listed as “not available for trading”, leaving the full
pool of companies at 2,013. While it would have been ideal to analyse the
numbers of all of these, manual collection for all companies for ten years can
be extremely cumbersome and resource-consuming. However, to ensure a diverse and
representative sample of companies, our set of 300 companies includes 100
companies with the highest market capitalization (from rank 1 to 100), another
100 in the middle (from rank 957 to 1,056) and the rest of the 100 ranked from
1,914 to 2,013. This allows us to go beyond focussing only on a handful of
well-known and large corporations. For the purpose of this analysis, the three
sets are referred to as Large, Mid-range, and Small respectively.
The data used in this analysis has been
collected based on the disclosures made by the companies in their annual and
Business Responsibility Reports (BRR). The data spans a period of 11 years
(from FY 2012-13, a year before the act was implemented to FY 2022-23, the
latest year for which data for all companies is available). It must be noted
that the companies on the NSE and their ranks by market capitalization vary by
year. However, for the purpose of consistency of the sample, the set of
companies was chosen based on the rankings as of Mar 31, 2023. While most
Indian companies report their data for financial years, a handful of companies
report it by calendar year. For ease of analysis, the data for a calendar year
has been listed under the financial year with which most of its month overlap
(so, data for calendar year 2022 has been counted as part of data for FY
2022-23).
The following sections list some key findings from the data.
The number of cases reported by companies in their annual reports has
increased over the years
Over this period, there has been an increase
in the number of cases reported in India Inc. under the POSH Act. Even before
the POSH Act came into effect, a few companies were reporting the number of
complaints of sexual harassment they had received through the year as part of
their business responsibility reports. 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 2020-21, the first year of the Covid-19 pandemic. A total of 586 cases were reported across the 300 companies, as compared to 961 cases a year ago. This number increased to 767 in FY 2021-22, and then jumped by 51.2 percent in the subsequent year to 1,160.
The resolution of cases has not grown at the same pace as number of
complaints
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 percent increase vis-a-vis the previous year, 2.1 percent
fewer complaints were resolved as compared to a year ago.
Similarly, while the number of complaints has seen a surge post FY 2020-21, the first year of the pandemic, the number of resolved cases has trailed significantly Companies are also required to disclose the number of complaints that were unresolved and were pending at the end of each financial year. The act mandates that inquiries into complaints should be completed within ninety days. The number of pending cases for this set of companies has also been growing over the years (Figure 2). However, it is noteworthy that the number of pending cases is smaller than the gap between reported and resolved cases. This could be likely due to a number of factors including the complainant withdrawing their complaint, and/or either the complainant or the accused leaving the company.
What the numbers tell us, and what they don’t
At the outset, the increasing numbers can
appear alarming, indicating that incidents of sexual harassment at the
workplace are growing. While this can be true, the numbers on cases of sexual
violence always need to be read with caution. As the International Labour
Organisation (ILO) has noted, the “lack
of reported cases of sexual harassment in no way implies that there have been
no such incidents”. Reported cases often reflect only a certain fraction
of all cases, since all survivors may not always feel comfortable or safe
to report such
cases for various reasons –
from privacy concerns, to concerns of social sanction and stigma, to the fear
of backlash and retribution, especially if the perpetrator is someone in a
position of power.
One factor that makes a clear difference is
how easy and safe it is to report such cases, and how much the survivor can
trust the process (see for example ILO, Lorenz and Jacobsen, 2021; Stanek et al, 2023). In principle, a higher number of reported cases could be an indicator
of higher incidence or improved awareness and better complaints and redressal
mechanisms and cultures in organisations, or both. However, in this case it is
reasonable to believe that installing transparent mechanisms for safe reporting
and resolution would enable better reporting.
The cases are being reported only by a handful
of companies
What is striking is that the bulk of the
sexual harassment cases are being reported only by a small share of companies.
For instance, the 1,160 cases reported in FY 2022-23 were across just 81
companies of the 300 companies in our dataset i.e. 219 companies did not report
any case under the POSH Act that year. In fact, 50 percent of the cases were
reported across just eight companies.
This trend was not specific to 2022-23. Right from FY 2013-14, the year when the POSH Act came into force, only a handful of companies have been reporting complaints under the POSH Act (Figure 3). Majority of the companies have been reporting zero complaints, often across years. Further, there are companies that have not reported any numbers in their annual reports even though this is a mandatory requirement. This is despite the fact that companies face financial penalties for not making these disclosures.
Further, between 98-100 percent of the reported cases were reported by the “Large” companies in our dataset i.e. companies ranked among the top 100 by market capitalization on the NSE. About 1-2 percent of the cases came from the “Mid-range” companies, and the “Small” companies reported no cases of POSH in any of the years (Figure 4).
It is plausible that since bigger companies
have more employees, including more women, they are likely to have more
incidents of sexual harassment than smaller companies with fewer employees.
Additionally, bigger firms may also have more resources to invest in creating
the right infrastructure, trainings and mechanisms for the prevention of sexual
harassment and redressal in cases where such harassment occurs. Further, since
the act is applicable only to organisations that have ten or more employees, some
smaller companies may not fall under the purview of the act, and therefore, may
not report any cases.
But the data reveals that firm size is not the
only explanation for the low number of cases. Indeed, the companies belonging
to the “Small” category in our dataset have not reported any cases. But several
companies listed among the top 100 have also reported zero cases, often for
multiple years. In FY 2022-23, 27 companies among the top 100 reported zero cases
of sexual harassment. Further, 14 of these did not report any cases in any year
since the act came into force.
Policy implications
When it comes to policies that can enable
women to be part of formal employment, corporate India’s focus largely tends to be on
maternity and childcare benefits (including leaves, financial support,
flexibility etc). These are extremely important policies – however, if the
day-to-day experience of women at workplaces has the shadow of sexual
harassment looming large, it is a continuous emotional and psychological burden
that takes a severe toll on the well-being of women, and significantly
diminishes their ability to work productively. Further, if not addressed
adequately and in a timely manner, sexual harassment could take the form of
routine experiences, impacting women on an everyday basis. Unlike policies that
are specific to women at certain life-stages, effectively implementing the POSH
Act benefits all female employees regardless of their age, nature of
employment, marital status, whether or not they have children.
Implementing the POSH Act in letter and spirit
is critical to enabling women’s participation in organisations, and also in
cultivating safe and healthy workplaces and work cultures. And yet, various
research studies, news and field reports (examples here and here) have
highlighted compliance on the requirements of the POSH Act remains poor.
In 2023, while hearing a case, even the Supreme Court of India lamented that there were “serious lapses in the
enforcement of the Act” even after a decade of
the law being implemented. The Court observed further that no matter how
valuable the enactment of the law might be, it would only succeed in providing
the dignity and respect that women deserve at the workplace if all State and
non-State actors were to enforce it proactively.
Thus, the low numbers reported by several
companies should serve 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. 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. 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. We surveyed 200 senior human resource officers for another study
that we conducted as part of CEDA’s ongoing project investigating
demand-side barriers to women’s participation in paid work in India. More than
half (59 percent) of the respondents said that their organisations had not set
up Internal Complaints Committees that are mandated by POSH Act.
New research by Anisha Sharma and her
colleagues currently in the field (see here and here) seeks to
understand why compliance by firms is so low, and whether it is an outcome
of financial and informational constraints that prevent them from implementing
the law to the fullest extent, or simply regressive gender attitudes on
the part of senior management. This research also seeks to examine whether the
constraints faced by larger firms are different from those faced by
smaller firms. Ongoing research by
Kanika Mahajan and her colleagues finds that after the introduction of the POSH
Act, smaller regulated firms became reluctant to hire women. The research
argues that this is because (given a high baseline share of men) each
additional woman employee hired elevates the risk of the firm having to deal
with a sexual harassment case. For smaller regulated firms, the increased
compliance costs matter, and therefore, less profitable firms are more likely
to employ fewer women relative to men after the passage of the act.
Lastly, the act’s requirement of proactive
reporting of the numbers on POSH complaints can serve as an important
accountability measure, and can enable effective evaluation of the policy.
However, the limited and scattered availability of the data currently makes it
difficult to use these numbers to effectively identify gaps and/or track
progress. Given that companies release data in different formats, compiling
data for multiple companies becomes an extremely tardy and manual process,
prone to errors and gaps. Consequently, most efforts to manually compile the
data remain limited to a handful of big and well-known firms, with smaller
firms inadvertently escaping scrutiny. Making numbers from all companies
available in a common and publicly available dataset can enable proactive
tracking and early detection of gaps.
Acknowledgments: Data for this analysis was collected by a team of interns that was led
by Arshia Kohli and included (in alphabetical order): Aditi Inamdar, Aryika
Mehrotra, Isha Dhar, Jaanya Wadhwa, Joy Mehta, Kiah Mehta, Rishika Kayan,
Sidharth Wagle and Tanya Mehra
I have republished this article as per due process described on CEDA's website as found this useful and should be useful for interested blog readers.
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