Key Recent Developments in Indian Employment Law Impacting Diversity in the Workplace

Posted In:

Four key recent developments in Indian employment law will impact diversity and inclusiveness policies of companies operating in India.  The first is the enhancement of maternity leave benefits.  The second is a set of changes to workplace terms and conditions – mainly those specific to women – in certain companies located in the State of Maharashtra, where the economic hubs of Mumbai and Pune are located.  The third development is a new reporting requirement for certain companies regarding their efforts to prevent sexual harassment in the workplace.  The fourth is the Indian Supreme Court’s decriminalization of private consensual sexual conduct between same-sex adults.  Each of these developments is described in turn.

Enhanced Maternity Benefits

In 2017, the central government amended the Maternity Benefit Act of 1961 to increase the period of maternity leave from 12 to 26 weeks for women with fewer than two surviving children.1  Women with two or more surviving children continue to be entitled to 12 weeks of maternity leave. The amendment also provides 12 weeks’ leave to women who adopt children under the age of three months or women who have children through surrogacy.

Employers with 50 or more employees are also required to provide daycare facilities to women returning to work following maternity leave.  The amendment allows women to work from home if the nature of their work permits under the terms and conditions agreed to by the employer and employee.

In an amendment to the Payment of Gratuity Act of 1972,2 along with a general increase of end-of-employment payment (called a “gratuity” under the law) from INR 1,000,000 to INR 2,000,000 paid to employees with at least five years’ “continuous” service,3 the maximum period of maternity leave that can be counted towards the five-year “continuous” service requirement was increased from 12 to 26 weeks.

Additional Protections for Women Workers in Maharashtra

The Maharashtra Shops and Establishments Act largely governs the general workplace conditions in commercial establishments in the State of Maharashtra.  This law was recently overhauled, with many of the changes pertaining to the working conditions of women, including the following:

Prevention of workplace sexual harassment. The amendments emphasize the need for employers to take all necessary measures to “strictly” implement the central legislation on the subject, i.e., Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act of 2013 (the “Prevention of Sexual Harassment law”). This law broadly defines sexual harassment and creates a mechanism to redress complaints of harassment, specifically requiring each establishment with 10 or more employees to establish an “Internal Committee” to receive and redress complaints of workplace sexual harassment raised by women.

Working conditions requirements.  Employers are required to, among other things:

  • maintain a complaint box;
  • prominently display phone numbers of local police and women’s helpline;
  • provide proper lighting and illumination inside the establishment, its
  • surroundings, and places that women may visit for work purposes;
  • if the establishment has 10 or more female workers, engage a sufficient number of female security guards; and
  • provide separate and safe restrooms for women.

Daycare Facilities.  In establishments where 50 or more employees are employed, employers must provide daycare facilities for employees’ children.

Night-Shift Work Protections for Women.  The amendments also prescribe specific working conditions for women working night shifts.  In particular, an employer may require a woman to perform night-shift work (i.e., between the hours of 9:30 p.m. and 7:00 a.m.) only if: the woman provides written consent to work that shift; the number of women working that shift is no fewer than three at any given time; and the employer provides safe and secure transportation between the workplace and the doorstep of the woman’s residence.  The law also bars women from working the night shift during a 24-week period before and after giving birth.  However, this bar may be lifted at the request of the employee if supported by medical certification from a qualified medical practitioner stating that neither the woman’s health nor that of the child would be endangered.

Health, Safety, and Welfare Committee.  Employers with 100 or more workers are now required to create a Health, Safety, and Welfare Committee, consisting of an equal number of employer and worker representatives, a “sufficient number” of which should be women (if the employer has women workers).  The duties and responsibilities of the committee include surveying the premises and determining if areas are susceptible to accidents or have hazardous objects; rectifying such defects; conducting health and wellness camps once a year; creating awareness of any contagious diseases, epidemics, etc.; conducting recreational activities annually; and organizing social and educational awareness programs.

Reporting Requirements on Compliance with the Prevention of Sexual Harassment Law

As a result of amendments to the Companies Act of 2013, as of July 31, 2018, companies must now disclose in Board of Directors reports whether or not they have complied with the Prevention of Sexual Harassment Law’s requirement to create an “Internal Committee” in every establishment with 10 or more employees, for the purposes of receiving and redressing sexual harassment complaints. Failure to comply with this reporting requirement may lead to a minimum fine of INR 50,000, and even imprisonment of the company’s officers.

It is also important to note that the Government of India has launched an online platform to receive sexual harassment complaints from women employees employed in both the private sector and the public sector, known as “She-Box” (Sexual Harassment Electronic Box).6  The government will review these complaints, forward them to the Internal Committees of the respective employers to investigate, and monitor the employers’ efforts in addressing the complaints.

Decriminalization of Consensual Same-Sex Acts

On September 6, 2018, in a set of landmark decisions, the Supreme Court of India declared unconstitutional Section 377 of the Indian Penal Code, 1860 (IPC), insofar as that law punished private, consensual sexual relationships between two adults of the same sex.7  The Court emphasized that homosexual persons have a fundamental right to live with dignity without any stigma attached to their sexual orientation, and are entitled to the equal protection under the law.

As a result of these decisions, if employees are discriminated against on the basis of their sexual orientation, those employees will now have a claim for a violation of their fundamental rights of freedom of expression.  Moreover, previously, many employers were hesitant to implement affirmative action programs benefiting their LGBTQ workers, as those employers were concerned that they would be considered to have aided and abetted the crimes specified under Section 377.  This decision will likely embolden employers to now include LGBTQ workers in their diversity and inclusiveness practices.

Conclusion

The landscape of Indian employment law is rapidly changing, especially from a diversity and inclusiveness perspective.  For American and other non-Indian employers, navigating these changes not only poses legal challenges, but also complex cultural challenges, thus requiring the involvement of experienced counsel.  Littler will continue to monitor and report on these developments from India.

(Published in: https://www.littler.com/publication-press/publication/key-recent-developments-indian-employment-law-impacting-diversity)

Co- Authored by Veena Gopalakrishnan (Associate, AZB & Partners) with Lavanga Wijekoon, Trent Sutton and Saba Alvi.

1 The Maternity Benefit (Amendment) Act, 2017, available at  https://labour.gov.in/sites/default/files/Maternity%20Benefit%20Amendment%20Act%2C2017%20.pdf.

2 Payment of Gratuity (Amendment) Act, 2018, available at http://egazette.nic.in/WriteReadData/2018/184298.pdf.

3 Indian law generally requires commercial establishments with 10 or more employees to make a lump-sum payment, known as a “gratuity,” to an employee terminated as a result of resignation, retirement, superannuation, death, or disability due to accident or disease.  An employee is eligible for this benefit upon completing at least 5 years of continuous service with the employer, except in the case of death or disability.  The gratuity is calculated at the rate of 15 days’ average wages for every year of completed continuous service.

4 Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Rules, 2018, available at https://mahakamgar.maharashtra.gov.in/writereaddata/Portal/Images/pdf/Regulation_of_Employment_Conditions_of_Service_Rules_2018.pdf.

5 See Companies (Accounts) Amendment Rules 2018, under §134 of the Companies Act 2013.  The Prevention of Sexual Harassment Law already contains provisions requiring companies to disclose, in their annual reports, details such as the number of complaints received, number of cases redressed, and pending matters.  This new requirement enhances the transparency on companies’ efforts to comply with the Prevention of Sexual Harassment Law.

6 Ministry of Women and Child Development, SHe-BoxOnline Complaint Management System, available at http://www.shebox.nic.in/.
7 Section 377 of the IPC criminalized voluntary, carnal intercourse “against the order of nature” with any man, woman or animal.

Published In:Littler-Insight [ ]
Date:September 2018