POSH Act, Maternity Benefit and the Four Labour Codes: ICC Constitution, Annual Reports, 26-Week Leave and an Executive Readiness Analysis

1. Statutory Overview and Legislative Intent

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act)

The POSH Act gives statutory form to the guidelines laid down by the Supreme Court in Vishaka v. State of Rajasthan (1997). It recognises that sexual harassment violates a woman's fundamental rights to equality, life and dignity and to practise any profession. It places the duty to prevent and redress harassment squarely on the employer. In Aureliano Fernandes v. State of Goa (2023), the Supreme Court found widespread gaps in implementation and directed authorities to verify that committees are constituted and functioning.

• Section 2: definitions of aggrieved woman, employee (including temporary, ad hoc, daily wage, trainees, interns and contract workers), employer and workplace (including places visited arising out of employment and transport provided by the employer).
• Section 4: Internal Committee (IC, widely called the ICC) at every office or branch with 10 or more employees.
• Section 6: Local Committee constituted by the District Officer for establishments with fewer than 10 employees and for complaints against the employer.
• Sections 9 to 18: complaint, conciliation, inquiry, interim relief, report, action, confidentiality and appeal.
• Section 19: duties of employer.
• Section 21 and Rule 14: annual report of the committee.
• Section 26: penalties.

Maternity benefit

The Maternity Benefit Act, 1961, substantially enhanced by the Maternity Benefit (Amendment) Act, 2017, is now consolidated in Chapter VI of the Code on Social Security, 2020. Its purpose is to protect the employment of women during maternity and to ensure income and health support before and after childbirth.

The four Labour Codes

2. Applicability and Threshold Matrix

A. POSH Act

B. Maternity benefit

C. Labour Code thresholds that change compliance

3. Step-by-Step Compliance and Filing Workflow

A. Setting up and running the POSH framework

1. Constitute the Internal Committee at each office or branch with 10 or more employees, by written order of the employer, with the composition required by Section 4. Pay the external member's fees as prescribed in Rule 4.
2. Adopt a policy on prevention of sexual harassment, covering the definition, examples, procedure, confidentiality, and consequences.
3. Display the penal consequences of sexual harassment and the order constituting the Committee at conspicuous places (Section 19(b)).
4. Train employees and Committee members through workshops and awareness programmes at regular intervals (Section 19(c)).
5. Register details of the Committee on the SHe-Box portal of the Ministry of Women and Child Development where required, and with the District Officer as the State directs.
6. Handle complaints: receive a written complaint within three months of the incident (or the last incident in a series), extendable by three months for reasons recorded. Offer conciliation at the complainant's request (without monetary settlement). Otherwise conduct the inquiry following natural justice, complete within 90 days, and give the report within 10 days of completion. The employer acts on recommendations within 60 days.
7. Interim relief: during inquiry, on the complainant's request, recommend transfer, leave of up to three months, or restraint on the respondent reporting on the complainant's work (Section 12).
8. Annual report: the Committee prepares an annual report for each calendar year under Rule 14 with the number of complaints received, disposed of, pending for more than 90 days, workshops conducted, and the nature of action taken. Submit it to the employer and the District Officer. The employer includes the information in its annual report or, where no annual report is required, informs the District Officer.

B. Administering maternity benefit

1. Inform every woman employee in writing and by email of maternity entitlements at appointment.
2. On notice of pregnancy (in the prescribed form), confirm eligibility (80 days) and schedule leave.
3. Pay maternity benefit at the average daily wage for the period of absence, in advance for the pre-delivery period on request, and the balance within 48 hours of proof of delivery.
4. Provide nursing breaks, creche access (50 or more employees) and consider work from home arrangements.
5. Do not dismiss or discharge, or change conditions of service to her disadvantage, during the maternity absence (Section 12 of the 1961 Act, carried into the Code).
6. Where the woman is an ESIC insured person, maternity benefit is paid by ESIC instead of the employer, subject to ESIC conditions.

C. An executive readiness plan for the Labour Codes

1. Governance: appoint a cross-functional owner (HR, payroll, legal, finance, administration) and report progress to the board or audit committee.
2. Wage structure test: for each grade, compute the share of excluded components. Where it exceeds 50%, quantify the increase in PF, gratuity, leave encashment and bonus costs, and decide on restructuring.
3. Actuarial update: revalue gratuity and leave liabilities under AS 15 or Ind AS 19 using the Code wage definition, and assess the impact on the financial statements (past service cost).
4. Documentation: issue appointment letters to all employees in the prescribed form, update standing orders or service rules, and revise fixed-term contracts for parity and one-year gratuity eligibility.
5. Registrations and licences: migrate to the single registration under the OSH Code where required, and update contractor licences under the revised contract labour thresholds.
6. Payroll and processes: configure payment timelines (7th of the month, full and final settlement within two working days of separation), overtime at twice the wage rate, and leave accrual rules.
7. Safety and health: set up annual health check-ups for employees above the prescribed age, safety committees where required, and women's night shift safeguards.
8. Gig and platform workers: aggregators should map engagement models and set up processes for contribution and worker registration as schemes are notified.
9. Track State rules: labour is in the Concurrent List. States notify their own rules on many matters, so multi-State employers need a State-wise tracker.

4. Statutory Due Dates and Frequency Table

5. Interest, Late Fees and Penal Consequences

6. Practical Audit Pitfalls and Best Practices

• Constitute a committee at every location with 10 or more employees, not only at the head office. Count employees including contract workers, interns and trainees.
• Choose a genuinely independent external member and record the basis for selection. Courts have set aside inquiries conducted without a properly constituted committee.
• Keep inquiry files confidential and complete: complaint, notices, statements, evidence, minutes of each sitting, report and action taken.
• Prepare the annual report even if there are no complaints. A nil report is still required and is evidence of compliance.
• Train the committee in natural justice. Most challenges to POSH outcomes succeed on procedural grounds such as denial of opportunity to cross-examine or a biased member.
• Coordinate maternity benefit with ESIC. For insured women, ensure the claim is made through ESIC to avoid paying twice or not at all.
• Treat the Codes as a payroll project, not a legal memo. The largest impacts are on wage structures, gratuity valuation and full and final settlement timelines.
• Keep a State-wise rule tracker. Thresholds such as those for lay-off permission, factory registration and shops and establishments vary by State notification.

7. Statutory References and Official Sources