One Company, Multiple ICs? Decoding the POSH Act's 'Every Location' Rule

It's been over a decade since the POSH Act, 2013, laid down a clear framework for workplace safety. The provision mandating an Internal Committee (IC) at every location with 10 or more employees is unambiguous. Yet, a widespread and costly misconception persists. From my observations, numerous companies with multiple offices, branches, or entities continue to operate under a single, centralised IC at their headquarters. They then proceed to claim full compliance in their annual Board Reports filed with the Ministry of Corporate Affairs.

This practice has always been a legal risk, but in late 2025, it has become a corporate governance minefield. With the new Companies (Accounts) Second Amendment Rules, 2025, which came into effect this July, the era of hiding behind vague compliance claims is over. These rules now mandate granular public disclosures on POSH complaints and gender diversity, putting a glaring spotlight on corporate practices. This isn't just a POSH Act violation anymore; it's a direct challenge to the integrity of disclosures under Section 134 of the Companies Act, 2013. For listed companies, it also flies in the face of SEBI (Listing Obligations and Disclosure Requirements) Regulations that demand the highest standards of transparency and governance.

This article will demonstrate why that single IC model is not only illegal but also a significant reputational and financial liability in this new era of scrutiny. We will decode the 'every location' rule, solve common practical challenges, and look at the key court rulings that solidify this principle.

The Spirit of the Law: Why 'Every Location' Matters

The mandate to establish an IC at every administrative unit or office with 10 or more employees stems from a core principle: accessibility. The goal is to remove barriers for an aggrieved person.

• Proximity and Comfort: An employee in a branch office should not feel intimidated or be burdened with the logistical challenge of traveling to a different city to file a complaint with a committee of strangers. A local IC understands the specific workplace dynamics and is easier to approach.

• Swift Justice: A localised IC can conduct inquiries more efficiently and quickly, which is crucial for resolving sensitive matters without delay.

• Deterrence: The visible presence of an IC at a local level acts as a powerful deterrent against potential harassment, signalling that the organisation takes safety seriously everywhere.

The Legal Mandate and The Price of Non-Compliance

Under Section 4(1) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, it is mandatory for every employer to constitute an IC at "all administrative units or offices."

Failure to comply is not a minor oversight. The penalties are severe:

• A fine of up to ₹50,000 for the initial offence.

• Double the penalty for a subsequent offence.

• Cancellation of your business license or registration for repeated non-compliance.

  
  

This isn't just a compliance issue; it's a threat to business continuity.

Beyond the POSH Act: The New Era of Transparency and Gender Disclosure

The compliance landscape is tightening even further. As detailed in recent analyses on platforms like LinkedIn, the Companies (Accounts) Second Amendment Rules, 2025, effective from July 14, 2025, ushers in a new era of mandatory disclosures. This move by the Ministry of Corporate Affairs elevates POSH compliance from an internal HR matter to a key aspect of corporate governance, visible to shareholders, regulators, and the public.

What's new?

• Detailed POSH Reporting: Companies must now disclose in their Board Reports the number of sexual harassment complaints received, resolved, and those pending for more than 90 days.

• Gender Composition Disclosure: The rules mandate the disclosure of the gender composition of the workforce, including the number of female, male, and transgender employees.

• Maternity Benefit Act Compliance: Companies must also affirm their compliance with the Maternity Benefit Act, 1961.

  
  

The implication is clear: companies can no longer afford to treat POSH compliance as a mere box-ticking exercise. These new rules will expose companies that have a high number of unresolved complaints or a lack of gender diversity, impacting their reputation and investor confidence.

The Kerala High Court Ruling That Settles the Debate ⚖️

Any ambiguity on this topic was clarified by the judiciary. The case of Vineeth Shamil K. vs. Air India Charters Ltd. and Ors. provides a critical precedent.

• Case Facts: An inquiry against an employee was initiated by an IC belonging to a different subsidiary/entity than the one where the respondent employee worked.

• The Court's Decision: The Kerala High Court held that an inquiry into a complaint can only be conducted by the IC of the specific entity where the respondent is employed.

• The Implication: This judgment powerfully reinforces that jurisdiction is local. You cannot "outsource" an inquiry to a central or different entity's IC. Each location must be self-sufficient in its primary complaint redressal mechanism.

Solving the Practical Hurdles: A How-To Guide

Many companies struggle with constituting a local IC due to a lack of eligible employees. Here are the legally sound solutions to the most common challenges.

• Challenge 1: Only One Senior Woman Employee Available for Presiding Officer.

  
  

  Solution: The POSH Act specifies a term of three years for IC members. However, it does not prohibit their reappointment. You can renew the tenure of the existing Presiding Officer upon completion of her term, ensuring continuity and compliance.

  
  

• Challenge 2: No Senior Woman Employee at a Specific Location.

  
  

  Solution: The law allows for flexibility within the same organisation. You can appoint a senior female employee from another office or administrative unit of the same employer to be the Presiding Officer for that location's IC.

  
  

• Challenge 3: Not Enough Women Employees to Form the Committee.

  
  

  Solution: Similar to the Presiding Officer solution, you can nominate female representatives from other locations or units of the same company to be members of the IC. This ensures the committee meets its required composition.

The Ultimate Solution: A Proactive Approach to Diversity

While the above solutions ensure compliance, they often point to a deeper issue: a lack of gender diversity. The difficulty in forming an IC should be a wake-up call.

Building a more gender-diverse workforce isn't just an HR initiative; it's a strategic compliance and risk-management tool. By proactively hiring and promoting women across all locations and seniority levels, you naturally solve these structural challenges and foster a healthier, safer workplace culture.

Conclusion: Audit Your Compliance, Protect Your Business

A single, centralised IC is a relic of a misunderstood compliance model. The law is clear, the courts have confirmed it, and with the new disclosure requirements under the Companies (Accounts) Second Amendment Rules, 2025, the stakes are higher than ever. The solutions to practical challenges are available. Conduct an immediate audit of all your business locations. Ensure every office with 10 or more employees has its own properly constituted Internal Committee. Doing so isn't just about avoiding penalties—it's about upholding the law's true intent, building a transparent and accountable organisation, and guaranteeing a safe and equitable workplace for every single employee.