Arjun Paleri, Raisa Pinto and Harinee Seenivasan
The Karnataka High Court, on September 30, 2024, delivered a judgement[1] on the applicability of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“PoSH Act, 2013) to intermediaries (OLA in this case). While this order has been stayed[2] by a division bench of the Karnataka High Court, the principles discussed in the judgement have wider ramifications for all organizations.
Facts
The Petitioner was sexually harassed by a driver engaged by OLA (owned by ANI Technologies Private Limited - Respondent 2) in 2018 and accordingly, the Petitioner filed a complaint on the OLA Platform. The customer service executive of OLA informed the Petitioner that the driver has been blacklisted and will be sent to counselling. Unhappy with the resolution provided, the Petitioner filed a police complaint against the OLA driver. The Petitioner also sent a legal notice to OLA asking the Internal Committee (“IC”- Respondent 1) constituted at OLA under the PoSH Act, 2013, to take necessary actions under the said Act and subsequently, filed a PoSH complaint.
The Respondent 1 responded to the Petitioner’s complaint stating that it did not have the jurisdiction to entertain the Petitioner’s complaint as the driver was merely an independent contractor and not an employee[3], as defined under the PoSH Act, 2013.
Consequently, the Petitioner filed a writ petition in the Karnataka High Court seeking the court to direct the Respondent 1 to take actions in accordance with the PoSH Act, 2013.
Arguments
(a) Petitioner’s arguments: The Petitioner’s arguments were centered around the following points:
Definition of employee under the PoSH Act, 2013: The Petitioner contended that the definition of employee under the PoSH Act, 2013 is wide enough to cover the drivers of Respondent 2.
Drivers are employees of Respondent 2: Referring to the agreement between the drivers and Respondent 2, the Petitioner contended that Respondent 2 has complete control and authority over the drivers and hence, such drivers are employees of the Respondent 2.
(b) Respondent 1 & 2s arguments: The Respondents’ response to the points above were as follows:
Definition of employee under the PoSH Act, 2013: The Respondents argued that the driver-subscriber were not employees of the Respondent 2 but were merely independent contractors engaged on a contractual basis.
Driver-Subscribers not employees of Respondent 2: To support the above argument, the Respondent 2 relied on the click-wrap agreement between itself and the drivers. It highlighted that the arrangement with the drivers was not exclusive i.e, the drivers were allowed to have engagement with other entities in parallel to their engagement with the Respondent 2. It also added that it exercised no control or authority over the drivers as the drivers had the independence over their activity, such as flexible timings.
Judgement
The High Court ruled in favour of the Petitioner and made the following observations:
(a) The definition of employee under the PoSH Act, 2013 is wide enough to cover all possible scenarios and means of engagement between an employer and employee. Given the purpose of the PoSH Act, 2013, the term employee must be widely interpreted. Accordingly, the court added that terms such as ‘driver-subscriber’, ‘driver-partner’, ‘principle-to-principle basis’ and ‘independent contractor’ could be a façade that needs to be lifted.
(b) In its analysis of the agreement between the driver and the Respondent 2, the court noted that there are several provisions in the agreement such as the Respondent 2 using technology to control the activities of the driver, fixing prices, not providing details of the customers to the drivers, and other similar practices indicated that the Respondent 2 had significant control and authority over the drivers.
Analysis and Conclusion
Although the order has been stayed, the principles discussed in the order are likely to have the following impact:
While the PoSH Act, 2013 has widely defined the word employee, this judgement affirms that PoSH Act, 2013 applies to all establishments, irrespective of the mode of arrangement such establishments may utilize to engage individuals. ICs and establishments will now have to carefully consider all complaints filed with it under the PoSH Act 2013 as the scope and applicability of the said Act is expansive.
The judgement also analyzed the provisions of the contractual agreement between Respondent 2 and the driver, pinpointing the specific clauses that contradict the assertions made by Respondent 2 concerning its relationship with the driver. This suggests that in future cases, the Courts may take these subtleties into account and will not solely depend on the standard boilerplate clauses of the contract.
Irrespective of the outcome of the stay on the order, establishments will need to set up (if not already done) efficient grievance redressal mechanisms and train their IC members to address such complaints, regardless of the establishment’s arrangement with the individual against whom such complaint may be made.
[1] WP 8127/2019 (GM-RES), X vs ANI Technologies Private Limited.
[2] WA (Writ Appeal) 1493/2024, ANI Technologies Private Limited vs X.
[3] "employee" means a person employed at a workplace for any work on regular, temporary, ad hoc or daily wage basis, either directly or through an agent including a contractor, with or, without the knowledge of the principal employer, whether for remuneration or not, or working on a voluntary basis or otherwise, whether the terms of employment are express or implied and includes a co- worker, a contract worker, probationer, trainee, apprentice or called by any other such name;