Introduction
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act of 2013, commonly referred to as the “POSH Act”, stands as a significant legal framework in India. Its primary goal is to uphold a safe, secure, and respectful working environment for women across the nation. It actively works to prevent sexual harassment and establishes clear procedures for addressing such incidents. This legislative effort emerged directly from the significant Vishakha Guidelines, which were issued by the Supreme Court of India in 1997. These guidelines emphasised the vital need for effective measures to combat sexual harassment in the workplace.
A common misunderstanding persists within the business community, particularly among smaller businesses, that the POSH Act applies only to organisations employing ten or more individuals. This belief largely originates from the Act’s explicit requirement for such workplaces to establish an Internal Complaints Committee (ICC). The emphasis on the ICC threshold in public discussions and initial compliance talks has, over time, unintentionally overshadowed the broader reach of the Act. This has led many startups and micro-enterprises to mistakenly believe they are exempt from POSH obligations, thus, creating a significant and often unrecognised gap in compliance.
This widespread belief that smaller businesses are exempt from POSH compliance represents a critical lack of awareness. This misinterpretation is not merely an oversight; it stems from the prominent focus on the Internal Complaints Committee (ICC) requirement for organisations with ten or more employees. This initial focus, while accurate for larger entities, has unfortunately created a systemic vulnerability among small businesses, many of whom genuinely remain unaware of their legal duties. Such a lack of understanding can expose them to considerable legal and reputational risks, while leaving their employees without clear avenues for seeking justice.
Contrary to this common misconception, the protective scope of the POSH Act extends universally to all workplaces in India, regardless of their size, sector, or industry. This includes both organised and unorganised, public and private entities. For establishments with fewer than ten (10) employees, or in situations where a complaint is filed directly against the employer, the Act carefully provides an alternative, yet equally strong, mechanism: the Local Complaints Committee (LCC). These committees are required to be established at the district level to receive and address complaints of sexual harassment, thereby ensuring that no woman is left without a formal path to justice and resolution, irrespective of the size or structure of her workplace.
The POSH Act Fundamentals
The journey towards the POSH Act began with a critical judicial intervention. The Act, formally enacted in the year 2013, emerged as a direct legislative response to the landmark Vishakha Guidelines. These guidelines, formulated by the Supreme Court of India in 1997 following the harrowing Vishaka v. State of Rajasthan (1997) 6 SCC 241, were revolutionary. They effectively filled a critical legislative void by recognizing sexual harassment as a grave violation of fundamental rights enshrined in the Indian Constitution, including the right to equality (Article 14), the prohibition of discrimination on grounds of sex (Article 15), the right to practice any profession [Article 19(1)(g)], and the right to life and dignity (Article 21).
The Redressal: Internal Complaints Committee (ICC) versus Local Complaints Committee (LCC)
(a). ICC/ IC
The POSH Act establishes a two-pronged approach to addressing complaints, acknowledging the diverse organisational structures common in India. The primary mechanism for larger organisations is the Internal Complaints Committee (ICC). Every workplace with ten or more employees is legally required to form an ICC through a written order. The composition of the ICC is carefully defined to ensure fairness and impartiality:
- It must be led by a senior woman employee who serves as the Presiding Officer.
- It must include at least two internal members who are dedicated to women’s welfare or possess relevant knowledge in social work or law.
- There must also be one external member from a non-governmental organisation (NGO) or someone with expertise in handling sexual harassment cases, specifically to ensure independence and reduce potential biases.
- At least fifty per cent (50%) of the ICC members must be women.
The term for ICC members is typically three years from their appointment date. The ICC is responsible for investigating complaints within a strict ninety-day 90) period, providing temporary relief to the complainant (such as a transfer or leave), recommending disciplinary action against the perpetrator if the complaint is proven true, and submitting annual reports on compliance to the District Officer.
(b). LCC/ LC
For workplaces that have fewer than ten employees, or in specific situations where the complaint is directly made against the employer, the POSH Act provides for the establishment of a Local Complaints Committee (LCC) at the district level. This dual-committee structure is a strategic legislative design that recognises the unique realities and challenges of India’s varied economic landscape, especially the large informal and unorganised sectors, and the widespread presence of small businesses. In smaller setups, creating an internal committee might be impractical due to a lack of senior female employees, or it could compromise impartiality if the accused is the employer themselves.
The LCC, therefore, offers an essential external and independent path to justice, and ensures that women in these environments are not left without a formal system for addressing their grievances. This approach highlights the Act’s dedication to ensuring universal access to justice for all women, preventing loopholes based on organisational size, structure, or the nature of the employment relationship. It also implicitly places a significant responsibility on the State and District Officers to ensure the effective formation and operation of LCCs, thereby, extending the protective reach of the law to the most vulnerable segments of the workforce.
The Key Differences Between Internal Complaints Committee (ICC) and Local Complaints Committee (LCC)
| Feature | Internal Complaints Committee (ICC) | Local Complaints Committee (LCC) |
| Applicability/Employee Threshold | Workplaces with 10 or more employees | Workplaces with fewer than 10 employees, or when complaint is against the employer, or for domestic workers |
| Constitution Authority | Employer of the organization | District Officer (District Magistrate, Additional District Magistrate, Collector, Deputy Collector) |
| Composition | Presiding Officer (senior female employee), at least 2 internal members, 1 external member (NGO/legal expert). Majority women. | Chairperson (eminent woman in social work), 1 member (woman from local block/taluka), 2 members (NGO/legal expert, at least 1 woman), Ex Officio member (social welfare officer). At least 50% women. |
| Primary Jurisdiction | Complaints within the organization with 10+ employees | Complaints from workplaces with <10 employees, against the employer, or from domestic workers |
| Powers | Similar to Civil Court (summoning, evidence, documents) | Similar to Civil Court (summoning, evidence, documents) |
| Inquiry Timeline | 90 days from complaint receipt | 90 days from complaint receipt |
| Reporting | Annual report to employer, who forwards to District Officer | Annual report to District Officer |
The Local Complaints Committee (LCC): For Companies with Less than 10 Employees
Ever wondered how smaller businesses handle workplace harassment complaints? That is where the Local Complaints Committee (LCC) comes in. It is a significant part of making sure the POSH Act works for everyone, especially in organisations that might not have their own internal committees.
Think of it this way: every District Officer (like your District Magistrate or Collector) is legally required to set up an LCC in their area. To make things super smooth, they even appoint ‘nodal officers’ whose job is to quickly receive complaints and whisk them away to the right LCC within a strict seven-day window. These LCCs have jurisdiction over specific parts of the district where they are set up.
Who is on the Committee?
The composition of the LCC is carefully defined to ensure a balanced and expert group. The following are the key points:
- Members are nominated by the District Officer.
- The committee must be led by a prominent woman in the field of social work, demonstrating a strong dedication to women’s causes.
- It also includes a woman working within the local administrative unit (such as a block, taluka, tehsil, ward, or municipality) and two members from non-governmental organisations (NGOs) or individuals who are very knowledgeable about sexual harassment issues.
- It is stipulated that at least one of these two members must be a woman, and at least one must have a background in law or legal knowledge.
- Furthermore, an Ex Officio member, typically the officer responsible for social welfare or women and child development in the district, is also part of the committee. An important overarching requirement, applicable to both ICCs and LCCs, is that at least fifty per cent (50%) of the committee members must be women.
The Role
The LCC is given significant powers, similar to those of a civil court. This includes the authority to summon and compel the attendance of any person, question them under oath, demand the discovery and production of documents, and receive evidence relevant to the investigation. These strong powers are not just formalities; they ensure that even in the smallest establishments, investigations are thorough and findings carry substantial legal weight.
The main duties of the LCC include receiving complaints of sexual harassment, conducting fair investigations into these complaints within a strict ninety-day timeframe, providing assistance to the complainant throughout the investigation process, and recommending appropriate actions and redressal measures to the employer. Beyond resolving individual cases, the LCC is also responsible for overseeing the overall implementation of the POSH Act at the district level and organising awareness programs and workshops to prevent sexual harassment. The LCC also has the power to recommend temporary relief measures, such as the transfer of either party or leave for the complainant, and ensures strict confidentiality to protect all involved parties from retaliation. In certain circumstances, the LCC can even act as an appeals body for decisions made by ICCs.
The LCC is specifically authorised to receive complaints in several key situations: from women working in organisations with fewer than ten employees, when the complaint is made directly against the employer themselves, and from domestic workers. The strong authority of the LCC as a cornerstone of justice for vulnerable individuals is further emphasised by judicial confirmation.
In the important case of Global Health Private Ltd v Local Complaints Committee, District Indore & Ors [(2019) 15 SCC 784], the Supreme Court decisively upheld the LCC’s authority under Section 6 of the Act. This ruling clearly affirmed the Act’s applicability to workplaces with fewer than ten employees, strengthening the accessibility of justice for employees in smaller establishments and reinforcing the decentralised nature of the Act’s implementation.
The granting of civil court-like powers to the LCC, combined with this judicial support, ensures that its recommendations are not merely suggestions but carry significant legal weight. This is particularly important in smaller workplaces where power imbalances are often noticeable, and the employer might be the accused. This framework provides a credible, external, and legally empowered body for seeking justice, building confidence in the redressal mechanism among employees in small and unorganised sectors, which historically have been vulnerable due to a lack of formal structures. It also places a clear, enforceable obligation on District Officers to ensure LCCs are operational and effective.
Employer Responsibilities for Small Businesses (Under 10 Employees)
Even though a small business with fewer than 10 employees is not legally mandated to constitute an Internal Complaints Committee (ICC), it remains fully subject to the comprehensive provisions of the POSH Act. The Act places a fundamental and universal responsibility on every employer, regardless of their organisation’s size, to create and maintain a safe working environment that is free from sexual harassment.
This foundational duty of care extends universally, beyond merely the formation of a committee. It implies that even if a small business does not require an ICC, it cannot abdicate its responsibility to prevent harassment and facilitate redressal through the Local Complaints Committee (LCC). The policy and awareness programs, for instance, are proactive, preventive measures that are important for focusing on a safe environment and empowering employees to report, even before a complaint formally arises.
Here are the key responsibilities for small businesses under the POSH Act:
- Formulate & Disseminate POSH Policy:
- Draft a comprehensive internal policy against sexual harassment and make it accessible to all employees.
- The policy should clearly define sexual harassment, outline unacceptable behaviours, explain complaint procedures, and detail consequences for offenders.
- Ensure the policy is written in simple, understandable terms for clarity.
- Display notices about the POSH policy and redressal mechanism in conspicuous places within the workplace.
- Conduct Awareness & Sensitisation Programs:
- Organise regular training sessions for all employees to educate them about the POSH Act, what constitutes harassment, and how to recognise and report incidents.
- These programs are instrumental in fostering a safe work culture and ensuring employees are fully aware of their rights and responsibilities.
- Assist Aggrieved Woman with LCC Complaint:
- In the event of a complaint, small business employers have a direct responsibility to assist the aggrieved woman in filing her complaint with the LCC.
- This includes guiding her through the process and providing necessary support.
- If the incident involves a criminal offense, the employer must also assist the woman in filing a First Information Report (FIR) under the Indian Penal Code such as Section 354 (assault or criminal force on a woman with intent to outrage her modesty), Section 354A (sexual harassment), Section 354D (stalking), Section 509 (insulting the modesty of a woman), or other applicable provisions, should she choose to do so. After the replacement of IPC by the Bharatiya Nyaya Sanhita (BNS), 2023, these offenses are now covered under Sections 74 (sexual harassment), 75 (assault or criminal force to woman with intent to outrage her modesty), 77 (stalking), and 79 (word, gesture or act intended to insult the modesty of a woman).
- Ensure Confidentiality:
- Maintain strict confidentiality throughout any complaint process.
- All details concerning the complainant, respondent, and witnesses must be kept confidential to ensure their safety and prevent social backlash or retaliation.
- Maintain Records & Annual Reporting:
- Maintain detailed records of any complaints received and the actions taken in response.
- Submit an annual report on POSH compliance to the District Officer.
Many small businesses mistakenly believe that if they do not need an ICC, their POSH obligations are minimal. This perspective overlooks the substantial and foundational responsibilities that apply universally. Neglecting these duties, even if they appear less stringent than forming an ICC, can still lead to severe legal and reputational consequences. This emphasises that POSH compliance for small businesses extends beyond merely having a committee; it encompasses establishing a comprehensive framework of prevention, prohibition, and redressal, ensuring a safe environment for all.
Summary: Employer Responsibilities for Small Businesses (Under 10 Employees)
| Responsibility | Actionable Steps |
| Formulate & Disseminate POSH Policy | Draft a clear, simple policy defining harassment, outlining complaint procedures, and consequences. Ensure it is accessible to all employees (e.g., handbooks, prominent display). |
| Conduct Awareness & Sensitization Programs | Organize regular training sessions for all employees to educate them on the POSH Act, types of harassment, and reporting mechanisms. |
| Assist Aggrieved Woman with LCC Complaint | Guide and support the complainant in filing a complaint with the Local Complaints Committee (LCC) if an incident occurs. Assist with police complaints if desired. |
| Ensure Confidentiality | Maintain strict confidentiality regarding the identity of the complainant, respondent, and witnesses throughout any process. |
| Maintain Records & Annual Reporting | Keep detailed records of any complaints received and actions taken. Submit an annual report on POSH compliance to the District Officer. |
| Safe Work Environment | Implement policies and a work culture that actively prevents and prohibits all forms of sexual harassment. |
Consequences of Non-Compliance for Small Businesses
Failure to adhere to the provisions of the POSH Act can result in severe consequences for employers, extending far beyond simple monetary penalties. Directly, non-compliance, such as the failure to constitute an ICC (for organisations with 10+ employees) or to comply with any other mandatory provisions of the Act (applicable to all, including small businesses), can lead to a penalty of up to INR 50,000 (Rupees Fifty Thousand) for the first offense.
For repeated violations, the Act prescribes more stringent actions, including potentially twice the initial punishment and, critically, the cancellation, withdrawal, non-renewal, or disapproval of business licenses or registration by the Government or local authority.
The financial penalties are often just the tip of the iceberg. The indirect consequences of non-compliance, particularly for small businesses, can be far more devastating and long-lasting. Non-compliance can severely damage an organisation’s reputation and public image, thereby, leading to negative publicity and a profound loss of trust among employees, clients, and other stakeholders. For a small business, which often relies heavily on word-of-mouth and a close-knit team, reputational damage and the erosion of employee trust can be catastrophic. Unlike large corporations, small enterprises may lack the resources to absorb significant legal battles or recover quickly from a tarnished image. Furthermore, non-compliance can create a hostile work environment, significantly affecting employee morale, productivity, and overall well-being.
Summary:
| Type of Consequence | Description |
| Direct Penalties (Fines) | Up to Rs. 50,000 for the first offense for failure to comply with any provision (e.g., policy, awareness, assisting LCC). |
| Business License Revocation | Cancellation, withdrawal, or non-renewal of business licenses/registration for repeated violations. |
| Civil Liabilities | Potential for civil lawsuits and financial compensation claims by the aggrieved woman. Employer complicity/negligence. |
| Criminal Liabilities | If harassment constitutes a criminal offense (e.g., sexual assault under IPC), separate criminal complaints can lead to fines/imprisonment for perpetrator, and the employer may face charges for negligence. |
| Reputational Damage | Negative publicity, tarnished brand image, and loss of trust among employees, clients, and stakeholders. |
| Operational & HR Impact | Decreased employee morale, reduced productivity, increased absenteeism, higher employee turnover, and difficulty attracting and retaining talent. |
| Legal Battles & Financial Losses | Costly litigation, diversion of resources, and potential for significant financial payouts beyond fines. |
Conclusion
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, is an important and far-reaching legal framework in India. It extends its protective ambit to all women in all workplaces across the country, irrespective of the organisation’s size, sector, or industry.
The role of the Local Complaints Committee (LCC) cannot be overstated in ensuring justice for women in smaller and unorganised sectors. The LCC serves as the indispensable mechanism for redressal in workplaces with fewer than 10 employees, for complaints lodged directly against employers, and for domestic workers. Its powers, which are akin to those of a civil court, coupled with the clear judicial affirmation of its authority, ensure that no victim is left without a formal and effective avenue for justice. This comprehensive coverage, particularly through the LCC mechanism, positions the POSH Act as an equalizer.
For small businesses, understanding this broader purpose transforms compliance from a perceived burden into an opportunity to contribute to a more equitable society and build a resilient, ethical enterprise. It reinforces that a safe workplace is a fundamental right, not a privilege reserved for large corporations. Small businesses must proactively formulate clear policies, conduct regular awareness programs, and understand their responsibilities to the LCC to mitigate significant legal and reputational risks, thereby fostering a respectful, productive, and safe environment for all employees.
YLCC would like to thank Nikunj Arora for his valuable insights into this article.
