Is a company Director an "employer" or an "employee" under the POSH Act?

Last updated: July 20, 2026 | By Reetika Gupta, Partner, Aristo Legal

When a workplace sexual harassment complaint names a company's Director, the natural question is whether the Internal Complaints Committee (IC) even has jurisdiction — or whether the matter must go to the government-appointed Local Complaints Committee (LC) instead. In Prof. (Dr.) J. Sundaresan Pillai v. Dr. K.K. Seethalakshmi (Kerala High Court, Division Bench, May 19, 2026; neutral citation 2026:KER:33013), the Court held that a Director's title alone doesn't make them an "employer" under the POSH Act. What matters is who actually controls the institution under its governing documents. Since IRTC's Memorandum of Association vested ultimate control in its General Body and Executive Committee — not the Director — the Director was legally an employee, and the IC retained jurisdiction to investigate him.

The legal framework: IC vs. LC

The POSH Act splits investigative authority between two bodies:

• Section 4 — Internal Complaints Committee (IC): Every workplace with 10 or more employees must constitute an IC to hear sexual harassment complaints.

  
  

• Section 6 — Local Complaints Committee (LC): Constituted by the District Officer, the LC steps in only where an establishment has fewer than 10 workers (so no IC exists), or where the complaint is against the employer himself.

  
  

That second trigger is the crux of this case: if the accused is genuinely the "employer," the IC has no jurisdiction and the complaint must go to the LC instead — a rule designed to prevent an employer from effectively sitting in judgment over a complaint against themselves.

Who counts as an "employer" under the POSH Act?

Section 2(g) defines "employer" broadly — generally, the person or body with ultimate control, supervision, and management of the workplace. Section 2(f) defines "employee" separately. The distinction isn't about seniority or job title; it's about where the Act places actual decision-making authority within the organisation.

The case: a Director's jurisdictional challenge

Prof. (Dr.) J. Sundaresan Pillai, a retired Senior Principal Scientist with the Council of Scientific and Industrial Research (CSIR), was serving as Director of the Integrated Rural Technology Centre (IRTC) in Kerala. A woman employee of IRTC filed a sexual harassment complaint against him on November 27, 2024. IRTC's IC issued a notice on February 3, 2025, directing him to appear.

The Director challenged the notice, arguing that as Director he was the institution's "employer" under Section 2(g)(ii), and that only the LC — not the IC — could examine the complaint. He also alleged that the IC's Presiding Officer was biased against him over an unrelated salary dispute. A Single Judge dismissed his writ petition and declined to interfere with the IC proceedings. The Director then filed a Writ Appeal before a Division Bench.

What did the Kerala High Court decide?

The Division Bench dismissed the appeal, agreeing with the Single Judge that the IC had jurisdiction. The Court's reasoning turned on IRTC's own governing documents — specifically Clauses 7, 18, and 23.2 of its Memorandum of Association:

• Ultimate control, administration, and management of IRTC vested in the General Body and Executive Committee, not the Director.

  
  

• The Director was himself appointed by the Executive Committee.

  
  

• While Clause 23.2.2 gave the Director responsibility for "overall management," that authority was expressly subject to the Executive Committee's and General Body's supervision — meaning it wasn't ultimate authority at all.

  
  

On that basis, the Court held the Director could only be classified as an employee, not an employer, and that the IC's notice was valid. The Court also rejected the Director's bias allegation, and noted that although the complainant technically sat on the IC, she did not participate in decision-making on her own complaint — which the Court treated as a safeguard of fairness, not a defect.

Why title alone doesn't decide the question

The core lesson of this ruling is straightforward: a "Director" or "CEO" badge does not automatically confer "employer" status under the POSH Act. What matters is whether that person holds genuine, ultimate control over the organisation — or whether they, too, answer to a board, executive committee, or general body. Designation is a starting point for the analysis, not the answer.

Practical takeaways for HR and compliance teams

1. Check the governing documents first. Before deciding whether a complaint against a senior executive goes to the IC or the LC, examine the company's Memorandum/Articles of Association, board resolutions, or governing charter to see who actually holds ultimate control. If a board or executive committee appoints and supervises the individual, they are very likely an "employee" for POSH purposes — regardless of title.

   
   

2. Don't let seniority stall the process. Senior executives accused of harassment may invoke "employer" status specifically to redirect the complaint to the LC or courts, adding delay. A documented understanding of your organisation's actual governance structure lets HR and the IC respond to such challenges quickly and correctly.

   
   

3. Recusal protects the process, not just the outcome. If a complainant happens to sit on the IC by role, ensure they're formally recused from deliberating on their own complaint — this case shows courts view that kind of safeguard favourably.

   
   

4. Document the appointment chain. Keep clear records of who appoints and supervises each senior role. This is exactly the evidence a court will look for if jurisdiction is ever challenged.

   
   

Frequently asked questions

Can a Director be investigated by the IC, or must it go to the Local Complaints Committee?

It depends on whether the Director genuinely holds "employer" status under the organisation's governing documents. If the Director is appointed by and answerable to a board, executive committee, or general body, they are treated as an employee, and the IC retains jurisdiction. Only where the accused is the true employer — or no IC exists — does the Local Complaints Committee (LC) take over.

What decides whether someone is an "employer" under the POSH Act?

Courts look past job titles to the entity's constitutional or governing documents (Memorandum of Association, Articles of Association, bylaws) to see who holds ultimate control, administration, and management. A person who is appointed by and supervised by a board or committee is generally an employee, not an employer, even if they hold a senior title like Director or CEO.

Can an IC investigate a Managing Director?

Yes, in many cases. The test is not the "Managing Director" designation but whether the MD holds ultimate control over the company. A Managing Director is appointed by the Board of Directors, functions subject to the Board's superintendence and direction under the Companies Act, 2013, and can be removed by the Board. Following the reasoning in Prof. (Dr.) J. Sundaresan Pillai v. Dr. K.K. Seethalakshmi, a person who is appointed by and answerable to a higher governing body is an "employee" for POSH purposes — so the Internal Committee retains jurisdiction to investigate a complaint against the MD. Only where the MD is, in substance, the person with ultimate control of the establishment (for example, a sole promoter-director with no effective supervising body) would the complaint need to go to the Local Complaints Committee instead.

Is every director an employer under the POSH Act?

No. "Director" is a designation; "employer" under Section 2(g) is a functional test based on who holds ultimate control, supervision, and management of the workplace. Non-executive and independent directors, nominee directors, and even executive directors who report to the Board typically do not satisfy that test individually. In most companies, ultimate control vests in the Board of Directors collectively (and, above it, the shareholders in general meeting) — not in any single director. A director's status must therefore be assessed against the company's Articles of Association, board resolutions, and the actual chain of appointment and supervision, not the title on their business card.

Who is the employer in a private limited company?

Under Section 2(g)(ii), the "employer" in a private workplace is the person responsible for the management, supervision, and control of the workplace. In a private limited company, that responsibility ordinarily rests with the Board of Directors as a collective body, since the Articles of Association vest the management of the company in the Board. In practice, POSH obligations — constituting the IC, framing the policy, filing the annual report — are discharged by the company acting through its Board and designated officers. This is also why an individual director or CEO who answers to the Board is generally an "employee" when personally accused: the ultimate controlling authority sits above them.

Can a founder be proceeded against by the ICC?

It depends on where control actually sits today, not on who started the company. A founder who now serves as CEO or director under the oversight of a Board — especially one with investor nominees or independent directors who can supervise or remove them — is, on the Kerala High Court's reasoning, an employee, and the IC can validly proceed against them. By contrast, if the founder genuinely holds ultimate control — for instance, a sole proprietor-style founder with no supervising board — they would be the "employer," and the complaint would fall to the Local Complaints Committee under Section 6, since the IC cannot sit in judgment over the employer himself. The governing documents and shareholding/board structure, examined as they stand on the date of the complaint, decide the question.

Does a complainant sitting on the IC create a conflict of interest?

Not automatically — provided the complainant is recused from participating in the committee's decision-making on her own complaint, as happened in this case. The safeguard lies in the recusal, not in barring IC members from ever being complainants.

This article is for general informational purposes and does not constitute legal advice. If your organisation needs guidance on IC composition, jurisdictional questions under the POSH Act, or workplace investigations involving senior leadership, Aristo Legal's employment and workplace compliance team can assist.