Effect of COVID-19 Lockdown on Inquiry Process under POSH Law
This Article analyses the meaning of force majeure, evaluates whether Covid-19 is a force majeure event, and its effect on the inquiry process under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act & Rules, 2013 (POSH Law).
Force Majeure is defined as an event that can neither be anticipated nor controlled like natural disasters, war, act of terrorism, medical epidemics etc. Such events are usually unforeseen or beyond the control of the party to a contract, thus permitting them to not fulfil the obligations duly laid in the contract.
Coronavirus pandemic (Covid-19) was identified as a case of natural calamity bythe Ministry of Finance, Government of India in its notification dated 19th February, 2020 allowing force majeure clause to be invoked wherever appropriate. Further, on 11th March, 2020, World Health Organization (WHO) categorized coronavirus as a global pandemic.
The obligation to conduct a time-bound inquiry (90 days) under the POSH Law can be considered as an implicit contract between the employer and employees, and a force majeure event could impact such a timeline. Hence, it is important to understand the provisions of Section 32 (applicable to contracts that consist force majeure clause) and Section 56(2) (applicable to contracts that do not have force majeure clause) of the Indian Contract Act, 1872. (‘Contract Act’) as it provides for such situations.
With the combined reading of Section 32 and 56(2), the important ingredients of force majeure are:
- An unforeseen intervening event that was not expected by the parties at the time of agreement has occurred;
- It has made the performance of the contractual obligations impossible in spite of all the efforts;
- The affected party has the burden of proof to show that the event has affected such party’s performance.
The IC of company ‘A’ has received a complaint during Covid-19 lockdown. (‘Event’). Due to this, in-person meetings cannot be held, and IC considers conducting a virtual inquiry in order to meet the timeline of 90 days. However, the complainant is unable to join the meetings virtually due to the presence of her family members at home. Consequently, IC is forced to defer the inquiry.
The above situation can be considered as a force majeure event due to the following:
- The Event was unforeseen and beyond the control of IC and the parties;
- The Event made inquiry proceedings (in-person and virtual) impossible in spite of the efforts of the IC.
- The reason for delay in inquiry must be recorded in the inquiry report by the IC.
Consequences of a Force Majeure Event
- The IC is under the obligation to inform the parties regarding the lockdown and make attempts to mitigate the delay by identifying an alternate mode of conducting inquiries.
- The IC will be relieved from conducting the inquiry until the Event ceases to exist, provided their attempts at finding alternate modes have failed. Further, the inquiry will have to be initiated immediately after the Event ceases to exist and completed within 90 days.
- If the Event continues for a long time, then the IC must discuss with the parties alternate modes of obtaining justice.
Effect of Force Majeure Event on the Inquiry Process under POSH Law
Meeting Timeline: As section 11(4) of the POSH Act states that ‘the inquiry under sub-section (1) shall be completed within a period of ninety days,’ it is pertinent to understand what happens if the IC exceeds the period of 90 days while conducting an inquiry.
This dilemma was resolved by the suo moto decision of the Hon’ble Supreme Court, ‘“it is hereby ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended w.e.f. 15th March 2020 till further order/s to be passed by this Court in present proceedings”.
Additionally, National Company Law Appellate Tribunal took suo moto cognizance of the situation and excluded the period of lockdown from counting the time limit of 180 days for completion of insolvency resolution process u/section 12 Insolvency and Bankruptcy Code, 2016.
Since limitation period under all laws, both general and special have been extended, it implies that if an inquiry exceeds beyond 90 days, then the same can be condoned.
The existence of these challenges do not absolve the IC from addressing the complaint, as virtual/hybrid inquiries can be conducted. This was emphasized by the Hon’ble Supreme Court in Energy Watchdog v. Central Electricity Regulatory Commission (2016), where it observed that just because an act has become onerous does not mean that it is impossible, as there are alternative modes of performance that are available.
Validity of email confirmation during virtual inquiries: During virtual inquiries, there were concerns regarding whether receipt of acknowledgement/confirmation via E-mail was valid.
While deciding on a similar issue, the Hon’ble Supreme Court in “Trimex International FZE Limited, Dubai v. Vedanta Aluminium Limited, India (2010)” observed that “In the absence of signed agreement between the parties, it would be possible to infer from various documents duly approved and signed by the parties in the form of exchange of emails, letter, telex, telegram and other means of communication.”
This decision has assisted several ICs in shedding inhibitions regarding conducting virtual inquiries, as this means that receiving Email acknowledgements from the parties on transcripts, evidence, reports etc., is valid and adequate.
The recognition of Covid-19 as a force majeure event, the suo moto decision of the Hon’ble Supreme Court to extend the limitation period, and the relaxations introduced by the Government comes as a huge respite since it helped address many concerns that the Covid-19 lockdown brought with respect to the inquiry process under the POSH Law.
Prerana Saraf (Legal Associate, POSH at Work) and Samriti Makkar Midha (Co-founder & Partner, POSH at Work)
POSH at Work is a firm that assists organizations with compliance & redressal of complaints under POSH Law.
 Black’s Law Dictionary, force majeure (enacademic.com).  Sakshi Raje, Force Majeure: the defense for non-performance of obligations in contracts, Law Times Journal (May 14, 2020), Force Majeure: the defense for non-performance of obligations in contracts – Law Times Journal.  Ministry of Finance, Force Majeure Clause, No. F. 18/04/2020-PPD (Issued on May 13, 2020).  World Health Organisation, Virtual Press Conference on Covid-19 (Mar. 11, 2020), who-audio-emergencies-coronavirus-press-conference-full-and-final-11mar2020.pdf.  Indian Contract Act, 1872, § 32, No. 9, Act of Parliament, 1872 (India).  Indian Contract Act, 1872, § 56, No. 9, Act of Parliament, 1872 (India). Id., § 56  Indian Contract Act, 1872, No. 9, Act of Parliament, 1872 (India).  Poorvi Sanjanwala, Karishma Bakliwal, What is force majeure? The legal term everyone should know during Covid-19 crisis, The Economic Times, (Oct.20,2020), Force Majeure: What is force majeure? The legal term everyone should know during Covid-19 crisis – The Economic Times (indiatimes.com).  Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, § 11(2), No. 14, Act of Parliament, 2013. (India).  National Company Law Appellate Tribunal, (Mar.30, 2020), Suo Moto – Company Appeal (AT) (Insolvency) No. 01 of 2020.  Insolvency and Bankruptcy Code, 2016, § 12, No. 31, Act of Parliament, 2016 (India).  Civil Appeal Nos. 5399-5400 of 2016.  Re (2010) 3 SCC 1.