Though Posh complaint reporting increased over the years but limited to handful of companies: Study

Though Posh complaint reporting increased over the years but limited to handful of companies

By Akshi Chawla – Director, CEDA

Ashoka University’s Centre for Economic Data and Analysis report released reveals that that though the complaints of sexual harassment at workplace have increased  over the years but have been limited to handful of companies.This analysis is based on data for 300 listed companies on the National Stock Exchange (NSE).

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.

Akshi Chawla - Director, CEDAThe 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.

 

 

Akshi Chawla – Director, CEDA

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.

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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.

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.

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.

The article was originally published by CEDA

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