Liability Of Online Aggregators Under POSH Act 2013- India

Anuradha Gandhi And Isha Sharma

12 April 2023 6:40 AM GMT

  • Liability Of Online Aggregators Under POSH Act 2013- India

    With the rise of the gig economy and the increasing popularity of aggregator platforms whether it be food delivery services, online marketplaces or any other similar e-commerce service platforms, it is crucial to understand whether these newly emerging e-commerce platforms are covered under the regime of the legislation called “Prevention of Sexual Harassment of Women at Workplace Act 2013”, also referred as POSH Act.

    The POSH Act is a comprehensive law aiming to prevent sexual harassment at workplaces. It specifically safeguards the women from being subjected to sexual harassment at workplaces.

    Sexual harassment is a violation of fundamental rights enshrined under the Constitution of India. The root cause of sexual harassment relates not much to the actual biological differences between men and women, but a display of disparity in power attributed to both men and women in social and economic life and perceptions about sexuality in society.

    Are Online Aggregators covered under the ambit of the POSH Act?

    Now the question that arises is whether aggregators which are digital platforms, can they be termed as “Employer” as defined under the POSH Act?

    Aggregator by definition, act as intermediaries connecting service providers with its customers via technology i.e., digital media platforms who must ensure that all parties involved in their platform whether it be service providers or customers, are protected from acts of sexual harassment.

    Aggregators, being digital platforms, can be considered as principal employers under the POSH Act. The term “Employer” has been defined under Section 2(g) of the Act in a much broader sense which includes person who are responsible for the management, supervision and control of the workplace.

    Liability of Online Aggregators:

    As a person supervising or operating the platform, he/she can be considered as principal employer. That is to say, the principal employer is obligated to ensure that his/her employees including visitors or third party service providers are not subjected to any sort of sexual harassment (i.e., whether as victims or perpetrators) at workplace and if they are, it is the employer’s responsibility to provide full assistance, to create a redressal mechanism and to initiate strict actions against the perpetrator as stated in Section 19 of the POSH Act. This may not only lead to a safer and better working environment for the employees but shall also result in productivity and efficiency which may further lead to overall growth of the organization.

    The aggregators tend to get rid of their liabilities by relying on the general rule that states that a person committing wrong shall be liable for his/her own act. But they fail to understand herein that the applicability of doctrine of vicarious liability exists, which refers to a legal principle that holds one party (principal) responsible for the actions or omissions of another party (employee/agent) that occur within the scope of their employment or agency.

    In the case of online aggregators for instance, Uber or Ola, the question of vicarious liability arises in situations wherein a driver, who is considered as an independent contractor is accused of committing an act of negligence or wrongdoing while providing the services through aggregator’s platform. However, the extent of liability under POSH Act is determined by analyzing and examining the relationship between the parties involved. Since, the relationship between the driver and rider is merely because of the contractual terms, the incident of sexual harassment arising therefrom, is construed within the regime of workplace as defined under the Act.

    In order to discharge their liabilities, they are required to implement POSH Policy, set up a mechanism for redressal of complaints pertaining to sexual harassment and provide regular training and awareness programmes to the service providers, failing which they be construed liable. The POSH Act provides for penalties for non-compliances, which can impact the reputation, goodwill as well as the financial viability of aggregators.

    In 2017, Uber faced a high-profile sexual harassment case that led to the resignation of its CEO Travis Kalanick. The case was brought forward by a former engineer, Susan Fowler, who published a blog post detailing her experiences of sexual harassment and gender discrimination at Uber. Fowler’s post spread like a fire, which further encouraged many other women to voice against incidents of sexual harassment with similar stories, leading to a wider investigation into Uber’s work culture. The investigation resulted in a report, which included recommendations for improving the company’s policies, increase in diversity and inclusion, training programmes and channelizing the mechanism for addressing and handling sexual complaints.[Her memoir is called “Whistleblower: My Journey to Silicon Valley and Fight for Justice at Uber]

    In the year 2021, one of India’s leading food delivery aggregators faced a lawsuit under the POSH Act. A delivery executive was accused of initiating unwelcome sexual advances and inappropriate comments to a female customer while he came to deliver her food order. The Company, being the aggregator, was also held responsible for the delivery executive’s actions. The Internal Complaint Committee (ICC) so formed found that the Company failed to provide a safe and harassment free environment for its customers and delivery executive and was also, therefore, held liable for payment of compensation to the aggrieved person and to adopt appropriate measures to prevent such incidents in the future times. In fact, sensitization and training programmes for all its employees was mandated under the POSH Act.

    In February 2023, a notice was issued to Company Dunzo by the Delhi Consumers’ Disputes Redressal Commission seeking INR 50 lakhs for negligent hiring and alleged sexual harassment by one of its delivery partner. It was held that such behavior amounts to deficiency in service and therefore, the dispute under the Consumer Protection Act was rightly raised before an appropriate forum.

    Ultimately, the afore-mentioned cases are few instances that how can aggregators be also liable under the POSH Act for failing to prevent sexual harassment on their platforms and also emphasize the need for aggregators to adopt appropriate robust policies and procedures for preventing and addressing issues of sexual harassment on their platforms. By doing so, they can create a safe and respectful workplace for all and contribute to building a more gender-equal society.

    Implementation of various policies by online aggregators to prevent sexual harassment at workplace:

    The aftermath of the Uber 2017 case led to a public outcry and significant amendments in their policies, as listed below.

    1. Training: Uber made it mandatory for all employees including drivers, to spread awareness of sexual harassment and for prevention and reporting of such incidents. The training covers topics including but not limited to identifying appropriate behavior, responding to complaints and promoting a respectful workplace culture.
    2. Anonymous reporting: Uber established a confidential reporting system, a 24*7 hotline for employees to report any incidents of sexual harassment, discrimination, bullying and unprofessional behavior.
    3. Investigation: Uber strengthened its investigation process for cases of sexual harassment. It now conducts a thorough investigation of every complaint and the investigation is overseen by a dedicated team.
    4. Enhanced Background checks: Uber adopted more stringent background check requirements for drivers and added continuous background checks to ensure that they are maintain safe driving records and do have any criminal convictions
    5. Termination for misconduct: Uber made it inevitable that sexual harassment will not be tolerated and it has implemented zero tolerance policy for any employee who engages in sexual harassment or discrimination. The company reserves the right to take disciplinary action against the perpetrator, including but not limited to termination.
    6. Implementation of a “no retaliation” policy: Uber made it clear that any employee who reports sexual harassment or other forms of misconduct will not face any sort of retaliation.
    7. Transparency and Accountability: Uber has committed to publicly report the incidents of alleged sexual misconduct in hope of establishing more transparency about the issue throughout the ride-hailing and traditional taxi industries.
    8. Introduction of new policies: Uber introduced new policies to prevent and address sexual harassment such as code of conduct for riders and drivers, a policy prohibiting romantic relationships between employees and customers. It also provides a 911 assistance button, real time location sharing and two-factor authentication in order to work on improving its culture and preventing harassment and discrimination.
    9. Disguised Phone Numbers: After the launching of “Number Masking” a new feature by Ola, Uber also came up with a new feature called “Disguised Phone Numbers” that aims to connect the riders and drivers with an anonymous number, without knowing the actual one. This new feature has been established to enhance security before, during and after ride.

    Overall, Uber has taken significant steps to address sexual harassment and improve its workplace culture since the 2017 case.

    Similarly, Amazon has also implemented a code of conduct setting out basic guiding principles, including no retaliation or victimization, zero tolerance policy on any kind of harassment, discrimination, intimidation or inappropriate language towards any employee.

    To conclude, all online aggregators are recommended to implement policies for preventing sexual harassment at workplace, including a code of conduct, training and awareness program, no-retaliation policy and redressal mechanism which shall contribute in creating a safe and respectful workplace for all that is free from sexual harassment and discrimination.

    Despite the enactment of a legislative framework, the majority of the aggregators are unaware of the same and are therefore at risk of liability. People fail to understand that compliance with the POSH Act does not merely constitute a legal need but also imposes a moral obligation for ensuring a good work culture. The lack of awareness of one’s liability is the inevitable cause of rising cases of sexual harassment at workplaces.

    The constant rise of the gig economy has urged the need of a law and government regulations to enhance security of both the users and the service providers.

    Further, the Code on Social Security, 2020 once implemented shall be likely to increase the burden of the online aggregators as it imposes responsibility on the online aggregators to ensure that they are correctly classifying the workers and providing them the safe and secure environment along with the liability to comply with the applicable laws and regulations.

    Authors: Anuradha Gandhi (Managing Associate) and Isha Sharma (Associate) at S.S. Rana & Co.

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