POSH Act Penalties for Non-Compliance — What Kerala Employers Risk

Most Kerala employers know the POSH Act exists. Far fewer understand what non-compliance actually costs — legally, financially, and reputationally.

The penalties for POSH non-compliance come from multiple laws simultaneously. This article explains each one accurately.

1. Section 26 — POSH Act, 2013 (Primary Penalty)

Section 26 is the direct penalty provision of the POSH Act.

What triggers it: Failure to constitute an IC, failure to conduct awareness training, failure to file the Annual Report, or failure to comply with any other provision of the Act or Rules.

The penalty:

• First offence: Fine up to ₹50,000

• Repeat violation: Double the penalty — fine up to ₹1,00,000

• Repeat violation: Cancellation or non-renewal of business registration, licence, or government approvals

The authority imposing the penalty is the District Collector of the relevant district or any other relevant authorities assigned by him. In Kerala, WCD Officers are also empowered to act under this provision.

Important note: All offences under the POSH Act are non-cognisable — meaning police cannot arrest without a warrant. Proceedings are initiated by the District Officer or through a complaint to the appropriate authority.

2. Section 28 — POSH Act, 2013 (Other Laws Still Apply)

Section 28 states clearly:

"The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force."

This means POSH Act penalties do not replace other applicable laws — they add to them. A non-compliant employer faces exposure under multiple legal frameworks simultaneously.

3. Companies Act, 2013 — Board Report Disclosure

For registered companies, Rule 8(5) of the Companies (Accounts) Rules, 2014 requires the Board's Report to include a statement on compliance with the POSH Act — specifically the number of complaints filed and their disposal. Moreover a company is required to file annual report to ROC which shall include information related to POSH Compliace in the year.

If a company omits this disclosure or makes a false statement, Section 134(8) of the Companies Act, 2013 applies — carrying a fine of ₹3 lakh to ₹50 lakh on the company and a fine of ₹50,000 to ₹5 lakh on every officer in default.

This elevates POSH compliance to the same legal seriousness as financial misreporting for registered companies.

4. Kerala Shops and Commercial Establishments Rules, 1961 — Rule 6B

Rule 6B of the Kerala Shops and Commercial Establishments Rules, 1961 — titled "Precaution Against Sexual Harassment in the Establishment" — is Kerala's state-specific layer.

This Rule requires every employer covered by the Kerala Shops and Commercial Establishments Act, 1960 to take precautions against sexual harassment in the establishment. Labour Officers conducting inspections under the Shops Act can verify POSH compliance as part of their inspection mandate. Non-compliance is an additional ground for action under the Shops Act enforcement framework.

This means for commercial establishments in Kerala — shops, offices, retail, hospitality, and service businesses — POSH compliance is verifiable by Labour Officers during routine Shops Act inspections, not just by WCD Officers.

5. Contempt of Court

Contempt of Court applies specifically where a court — typically a High Court — has issued a direction regarding POSH compliance and the employer fails to comply with that direction.

The Supreme Court in Aureliano Fernandes v. State of Goa (2023) issued directions to all States and Union Territories regarding POSH implementation. Courts have increasingly issued specific directions in POSH-related writ petitions. Failure to comply with such judicial directions constitutes civil contempt under the Contempt of Courts Act, 1971 — carrying imprisonment of 6 months.

Courts have also held that where an employer's breach of POSH obligations directly results in a complainant's inability to access justice, courts may take suo motu cognisance.

6. Kerala Women's Commission

The Kerala Women's Commission, constituted under the Kerala Women's Commission Act, 1990, has the power to take cognisance of complaints regarding violations of women's rights — including workplace sexual harassment.

The Commission can summon employers, examine records, and recommend action to the Government of Kerala. While the Commission does not impose direct financial penalties under the POSH Act, its summons carry the force of a civil court order. Non-compliance with a Commission summons or direction can result in referral to the appropriate legal authority and adverse findings that trigger further regulatory action.

The Real Cost — Beyond the Fine

The legal penalties are significant. The reputational and operational costs are often larger.

A POSH non-compliance finding means:

• Your business licence renewal is at risk

• Your Board's Report carries a compliance failure — visible to investors, auditors, and regulators

• An active complaint can become a police matter simultaneously under Bharatiya Nyaya Sanhita provisions

• Employees, candidates, and clients increasingly review organisations on POSH compliance before engaging
  
  What Kerala Employers Should Do Now

  1. Verify your IC is constituted and all members are within their 3-year term

  2. Check your Annual Report has been filed with the District Officer

  3. Register on the Kerala POSH Portal (posh.wcd.kerala.gov.in)

  4. Ensure IC members are trained — an untrained IC is a legally vulnerable IC

  5. Request a free compliance check from FIO Foundation

  FIO Foundation provides POSH compliance audits for Kerala organisations. We identify your gaps before a District Officer or Labour Inspector does.

  📞 +91 99617 71711 | fiofoundation.org | WhatsApp: "POSH Audit"