On 31st July 2018, the Ministry of Corporate Affairs notified1 the Companies (Accounts) Amendment Rules, 2018 ('Rules') under section 134 of the Companies Act, 2013 ('the Act'), thereby amending the Companies (Accounts) Rules, 2014. The Rules have inter alia amended Rule 82 to include Clause (x) which now requires every Company to report compliance with the provisions relating to the constitution of an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the 'SH Act'). Clause (x) of Rule 8 (5) of the Rules reads 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."

Notably, this amendment has been introduced based on the recommendation of the Ministry of Child and Women Development. The recommendation was made to the Ministry of Corporate Affairs in order to achieve the implementation of the SH Act in its true letter & spirit.

As it can be seen, the introduction of above-stated clause (x) under Rule 8 (5) now mandates all companies to report on compliance of provisions of SH Act relating to the constitution of Internal Complaints Committee. The non-compliance by a Company may result in imposition of a fine on the defaulting company under section 134 of the Act, which shall not be less than INR 50,000/- but which may extend to INR 25,00,000/- and imprisonment for every officer of the Company who is in default for a term which may extend to 3 years or with fine in the range of INR 50,000/- to INR 5,00,000/-.

It has been a matter of concern that while the SH Act and the rules made thereunder was introduction way back in the year 2013, the same has not been practically complied by the companies to the expected extent. With this amendment (which is definitely a positive step), the company/employer will be under a statutory compulsion to be remain compliant with the provisions of both the Act and the SH Act.


So far, 29 States/Union Territories have notified District Officers and constituted Local Complaint Committee3 (LCC) under the SH Act. It has been reported that all governmental instrumentalities (both at Centre and State levels) have been directed by the Ministry of Women and Child Development (the 'Ministry') to organize workshops and awareness programmes for sensitizing the employees about the provision of the SH Act. Besides, all Government of States/Union Territories have also been requested to advise the Secretary Industries/Commerce to organize similar workshops and awareness programmes each and every industry, business house, private sector entity of the States/Union Territories.

The Ministry issues advisories from time to time to Government of all States/ Union Territories, Ministries/ Departments in Government of India and leading business organization such as ASSOCHAM, FICCI, CII, CCI and NASSCOM to ensure effective implementation of the SH Act.

The Ministry has also launched an online complaint management system titled Sexual Harassment electronic–Box (SHe-Box) for registering complaints related to sexual harassment at workplace of all women employees in the country, including government and private employees.

In addition the Ministry has identified a pool of 223 Resource Institutions to provide capacity building programmes i.e. training, workshops, etc., on the issue of sexual harassment at workplace in order to create wide spread awareness about the Act across the country, both in organized and unorganized sectors.



2 'Matters to be included in Board's Report'

3 The Act mandates all the workplace having more than 10 workers to constitute Internal Complaint Committee (ICC) for receiving complaints of sexual harassment. Similarly, the Appropriate Government is authorized to constitute Local Complaint Committee (LCC) in every district, which will receive complaints from organizations having less than 10 workers or if the complaint is against the employer himself.

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