Madhya Pradesh High Court imposes a heavy fine for not constituting an IC

Madhya Pradesh High Court imposes a heavy fine for not constituting an IC

Recently, on 16th September, 2019 in the case of Global Health Private Limited Vs. Local Complaints Committee, District Indore and others, the Madhya Pradesh High Court imposed a large fine on an employer for failing to comply with mandatory provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Law”).

Facts: A complaint was made by Miss. Anjali Singh Thakur (“Complainant”), a female senior marketing manager of “Global Health Private Limited” (“Hospital”) alleging interference with her work, creation of an intimidating and hostile environment by the acts, misdemeanor and conduct by her immediate superior officer Dr. Gowrinath Mandiga, (“Manager”). Her repeated requests / constant complaints for protection and support sought from the superior authorities including the Managing Director of the Hospital, were left unattended. She found herself singled out, harassed and humiliated affecting her health and safety besides, potential threat to her future employment status. She, thus filed a complaint with the Women Welfare Section of Ministry of Women & Child Development, Government of India which subsequently forwarded her complaint to the Local Committee (“Respondent”), Pursuant to this, she was terminated by the Hospital. The Respondent conducted an inquiry and issued directions to the Hospital stating that disciplinary action be initiated against the Manager and also imposed a penalty of Rs.50,000/- for failing to constitute an internal committee. The Hospital thus, filed a petition in this Court challenging this order of the Respondent.

Arguments: The Hospital submitted that none of the communications made by the Complainant prior to or post the date of complaint contained any allegations of sexual harassment, and did not contain any mention of sexual harassment. They claimed that they were not given an opportunity to cross examine her and other principles of natural justice were violated. Further, the direction passed by the Respondent was against the principles of natural justice as the intention of the Manager was not taken into consideration and the Respondent jumped to the conclusion that the Complainant was subjected to sexual harassment. The Hospital therefore, directed that the complaint be investigated to find out the intention behind the alleged acts committed by the Manager. Furthermore, the Hospital stated that they had an internal committee in place and vehemently denied that a valid complaint was raised. Therefore, the internal committee had no occasion to look into the complaint.

The Respondent argued that once the complaint had been received notices were issued, sufficient opportunity was afforded to the Hospital and the Manager. However, due to the hostile and non-cooperative attitude of the Manager and the representative of the Hospital, the inquiry was prolonged. The Hospital was supplied with copy of the complaint subject to their request expressing ignorance about the complaint, after which they assured the Respondent that an inquiry would be held through the internal committee and/or employees grievance committee. However, neither was any inquiry conducted, nor was the report submitted. The Respondent had sent its representative to the Hospital to verify the existence of the internal committee, who found that there was no internal committee in existence at the Hospital. There was no notice board to that effect as well.

Observations: On hearing the arguments of both parties, the Court stated that the Law is essentially and predominantly, a social welfare legislation. The provisions contained thereunder must receive contextual meaning and are required to be interpreted broadly and liberally. The definition of sexual harassment given under Law is inclusive in nature, and provides that any one or more of the unwelcome acts or behaviour provided thereunder whether directly or by implication shall constitute sexual harassment. Therefore, the word “sexual harassment” must not receive narrow and obscure meaning.

The Court noted that “it is true that in the complaint, the Complainant did not specifically mention the mischievous acts of Manager behind such hostility and contemptuous treatment meted out to her for obvious reasons she suffered from fear psychosis apprehending extreme action by the Manager and others during currency of employment. However, as a sequel to the complaint, since the Hospital was hell bent upon it found excuses to terminate her employment camouflaged as if after appraisal. In fact, it is an arbitrary termination of employment. There was no appraisal, no counselling and no notice issued to the complainant. It is unfortunate that while the complainant in emails (placed on record) has expressed her anguish, helplessness and in secured work environment and looked up to the superiors for protection and safety but, the emails were treated as personal affront to get rid of the complainant from the employment.”

The Court observed that it was really unfortunate that the Managing Director did not care for the seriousness and sensitivity of the situation under which the complainant was subjected to, instead asked her to ‘bridge the gap’ with the Manager. Such indifferent and insensitive attitude of the Managing Director is deplorable. “Under the circumstances, it is imperative to strike a note of caution for the Managing Director of the Hospital to be sensitive and extra careful in dealing with pains and sufferings of the women employees at the workplace to avoid recurrence of such unfortunate incidences.

On the Hospital’s argument that the principles of natural justice were violated, the Court held that: “..the replies submitted by the Hospital and Manager were taken into consideration by the Respondent. Hence, it is incorrect to say that principles of natural justice were not followed. As the Hospital and the Manager themselves were responsible for non-cooperation in the enquiry, not appearing in spite of repeated opportunities to appear, the statement of the complainant was recorded. Therefore, it is palpably wrong to say that opportunity to cross-examine the complainant was not accorded to the Hospital and the Manager at any time.”

The Court noted that from the deliberations recorded during the inquiry by the Respondent, it was observed that no inquiry report was submitted by the Hospital, although they stated that they intended to refer the complaint to an internal employee grievance committee. “However, neither there is any material on record that enquiry was conducted and report submitted before the Respondent or before this Court. It shows that the Hospital did only lip service and was never interested in resolving grievance of the complainant. Moreover, the existence of the internal committee itself is doubtful at the Hospital. Even otherwise, if the complaint was referred, the same would be of no use since the person against whom acquisitions have been made, i.e., Manager was allegedly a member of such committee.

Held: The Court held that the Complainant is entitled to a compensation of Rs. 25,00,000/- for the pain and suffering, loss of reputation, emotional distress and financial loss for eighteen months for no fault on her part resulting into deprivation of right to live with dignity, payment of EPF and other monetary dues (if still not paid). This compensation was ordered to be paid to the Complainant within 8 weeks, failing which an interest at the rate of 09% would be levied. The Hospital was directed to issue a character and experience certificate during the period she was in employment with them, without attaching any stigma to her image; and to pay a penalty of Rs. 50,000/- (Rupees fifty thousand only) (if not already paid) for not constituting an internal committee.

PAW Comment: This judgment has reinstated the importance of setting up an internal committee within an organization, and that the repercussions of non- compliance of the Law could be manifold. The Law presently does not fix the quantum of compensation payable to a aggrieved. However, through this judgment, the Court has awarded a large compensation for the pain and suffering suffered by the aggrieved. This re-emphasizes the judicial view that the employer is responsible for ensuring and maintaining safe workplaces for all employees, and in case of a breach of the provisions of Law, they could be liable to pay high fines to the authorities and/ or large compensation amounts to the employees.

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