Disclosure of sexual harassment cases made mandatory in annual reports of private companies

Disclosure of compliance under the Sexual Harassment of Women at Workplace Act in the Annual Reports of Private companies now made Mandatory: Ministry of Corporate Affairs amends the Companies (Accounts) Rules, 2014.

“A major step towards making the workplace safe for the women in the private sector”: Smt. Maneka Sanjay Gandhi

Non-disclosure to draw penal provisions

In order to ensure safe workplaces for Women in the private sector, the Ministry of Women and Child had requested Hon’ble Minister for Corporate Affairs to mandate the disclosure regarding implementation of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act in the Directors Report of every company. Vide its notification dated 31.07.2018,the Ministry of Corporate Affairs has amended the Companies (Accounts) Rules, 2014, issued under Section-134 of the Companies Act, by inserting clause(X) as follows:-

“A statement that the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013”.

While thanking Hon’ble Minister for Corporate Affairs, Smt. Maneka Sanjay Gandhi stated that, “this is a major step towards making the workplace safe for the women in the private sector”. Smt. Gandhi also stated that she will be requesting SEBI to suitably incorporate this disclosure in the Corporate Governance reports of the listed Companies. This will cast as ever higher responsibility on the Directors of these Companies for implementation of the Act.

It may be noted that Section-134 of the Companies Act, 2013 provides the disclosure framework which the Directors of every company are required to comply with in the Annual Reports. This section also includes the penal provisions for non-disclosure. The inclusion of the compliance under the Sexual Harassment of Women at Workplace Act in the non-financial disclosures will ensure that the issue gets into the focus into Board of Directors of the companies

The Ministry of Women and Child Development has been making continuous efforts to mainstream the implementation of the Sexual Harassment of Women at Workplace Act, 2013. Detailed Rules under the Act were issued. It was ensured that all the ministries/ departments under the central government as well as the organizations working directly under them constitute the Internal Complaints Committee as mandated under them Act. A number of instructions have been issued by the DoPT on the request of the ministry to provide immediate relief to the women working in central government against sexual harassment at workplace. The ministry has also empanelled a number of entities who can provide training to any organization on effective implementation of the provisions of the Act. The ministry has provided a facility to all working women to file complaints under this Act directly with the ministry through the SHE-Box.

Please, click here, for the complete notification by the Ministry of Corporate affairs.