Understanding The PoSH Act In Retail Spaces

Written By: Vasudevan V, 🖊  edited  by Varna

Note from the Editor: ‘Explainers’ are a new series at Ungender Insights. An explainer is a conversation, not a traditional article. At Ungender our explainers aim to answer questions, but not just any question. These are questions that focus on the practical. We feature ready-reckoners or tip-sheets for common situations or terms that one comes across, while aiming to ensure PoSH compliance or implement D&I, in our workspaces. We hope the series proves useful!

Diversity and Inclusion (D&I) is now fast becoming an integral part of corporate governance and a big part of this has been the mandatory enforcement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (PoSH Act). While the PoSH Act comprehensively covers common connotations of what the legal definitions of an “aggrieved woman”, “employer”, “workplace” and ”respondent” are, the definitions in the law are simpler than they turn out to be in actual business. Today, we will examine how the PoSH Act plays out in the retail industry which employs a fair number of women in various roles each year. 

The Staffing Puzzle in Retail

In the retail industry, a typical business model combines different types of workers – some are regular employees, some temporary, some just free-pool or ad hoc or daily wage workers. This varied workforce is also hired using a variety of mechanisms which include direct hiring, hiring through an agent/contractor, contract workers directly hired or engaged  through the brand/third-party agencies, e.g., promoters, merchandisers or product consultant(s) with whom a contractual relationship is established for “services” with the brand/agencies, but not particular personnel.

The business model also then requires this varied workforce, with varying contractual arrangements to be employed in a complex structure of workplaces some of which don’t quite meet the straightforward definition of a workplace, for instance counter-staffers of brands who are deployed inside multi-brand retail outlets within a multi-outlets mall. Think about a multi-brand cosmetics store in an upscale mall. You walk in and find dedicated staff from various cosmetics brands selling their line of products within the larger cosmetics store. These are smaller workspaces, embedded in a larger workspace clustered  in a still larger workspace, a mall. How does this structure operate?

In reality, to set up and operationalise a multi-brand retail outlet several layers of contractual  relationships are required. For example, the main manager of the overall store is probably a direct employee (perhaps permanent or perhaps contractual) of the physical space’s owner. The multi-brand workspace owner contracts and probably pays rent for or payments of some kind to either the mall owner or the operator. 

Individual brands sign a contract with the owner of the store to sell their brands within the store but they don’t provide the personnel for in-store promotions, directly. The personnel are deployed by a third manpower, staffing or personnel agency whose sole business is to provide brand-level staff custom hired for retail businesses.

Thus, these personnel are neither employees of the brands they sell nor are they employees of the retail workspace owner. Instead they sign staffing contracts with the agency – they even hold the agency’s ID cards. They are, however, trained to sell particular brands and this is enabled by a contractual relationship between the people-agency and the brands that use them. These types of arrangements are common in workspaces that have canteens, security staff and housekeeping staff too. 

Now the law applies to all establishments and all personnel irrespective of whose payroll such employees are and the contractor/principal employer. In case of dispute or a complaint of sexual harassment, given the multiplicity of relationships, it becomes essential to map out the responsibilities, especially for purposes of compliance but even more for appropriate and quick redressal.

The key question, which arises is whose PoSH Committee (i.e. which agency or institution) is responsible, under law, to receive complaints, hold inquiries and to provide efficacious remedy to the aggrieved. 

PoSH Compliance Cheatsheet for Retail

Here is our tip-sheet for commonly occurring situations, in the retail space a complaint could typically be made by; 

1. By a woman employee, of the retail workspace, against another direct employee

2. By a woman employee, of the retail workspace owner’s contractor, against an employee

3. By a woman employee of a brand/its contractor operating out of a retail workspace,  against the retail workspace owner’s direct employee

4. By a woman employee of a brand operating out of a retail workspace or its contractor, against the brand’s own employee

5. By any woman employee, against a walk-in customer

6. By a customer, against any of the above categories of employees 

In situations 1 to 3 above, it is the retail space owner’s responsibility to ensure PoSH compliance and it is their ICC that must investigate and provide recourse/relief to the victims, including interim measures. In situations 4 and 5, though the retail space owner may not be directly responsible, the premises are the “workplace” as defined under the PoSH Act, and therefore it remains the duty of the workplace owner to both connect the complainant to the principal employer (i.e. the talent providing agency) and ensure that resolution takes place as per the procedure laid out under the law. As for situation 6, the retail workspace owner  whose “workplace” now becomes the workplace under the PoSH act should initiate an inquiry and ensure resolution as per due process.

Workers Rights in Retail Spaces 

The unfortunate reality is that most employees/contract workers engaged in the retail industry come from very vulnerable backgrounds. Poverty causes dependence on work and that, in turn, causes a very real fear of retribution which makes the lack of courage to come forward stronger. The situation worsens because not every contractor has established a PoSH Committee or, more commonly, has one that functions only in name for the purposes of compliance.

A busy business, coupled with a lack of training that explains why employee welfare is essential to profits, is a recipe for disaster. All too often such businesses try to circumvent procedure, either by implementing ad-hoc solutions that do no party any good, or more commonly simply ask the complainant/victim to leave. 

The Constitution of India, guarantees its citizens “equality of status and opportunity”, under Article 14. A safe workplace is, therefore, a woman’s legal right. With improved access to education and employment, millions of women have found the opportunity to enter the workforce and the retail industry in particular has often stepped up to provide these jobs. While this is a good thing, it is unfortunate that the retail industry hasn’t done enough just yet, to ensure the safety of the women it employs. 

Also Read: It Is Time To Review Your Anti-Sexual Harassment Policy

About the author: Vasudevan has a rich experience in legal and corporate governance over 35+ years experience in FMCG and Retail Industry. currently he is the General Counsel(Consultant) for Smollan-HUL JV and the Head – Retail Vertical for Ungender.

Ungender Insights is the product of our learning from advisory work at Ungender. Our team specializes in advising workplaces on workplace diversity and inclusion. Write to us at contact@ungender.in to understand how we can partner with your organization to build a more inclusive workplace.