The POSH Infringement
Nimit Patel, the Founder of ABC Chemicals and Dyes Pvt Ltd, found himself at the crossroads; irrespective of whatever he chose for the organisation, the end result would only be negative. On one side, he had a feeling of loyalty for an employee, with whom he had worked since a long time, and whose children he had seen growing up, while on the other, it was a question of a woman’s honour, and an organisational value of treating everyone with respect.
As a business leader, he did not want to make a decision that would create an impression that women in his firm were unsafe or were being treated with disrespect. At the same time, he did not want any man to be burdened with an unnecessary charge and pay an undeserving penalty. Even worse, he was concerned about the social shame that the family that was so dear to him would have to bear. As he flipped the coin to decide whether or not he should file criminal proceedings against his most trusted employee, Shamsher Singh, VP – Operations, his heart was pleading that the coin fall in his favour. He made a silent prayer imploring the coin to somehow flip in a manner that would help him to arrive at the right decision. As he clenched the coin in his fist, he began to recollect some of the mistakes he had made while building this organisation, some sensitivities that he had overlooked, and some clues that he had failed to identify. As he opened his fist, he hoped against hope that the answer would fall in Shamsher’s favour, and the coin would somehow aid him in finding a way through which this crisis could be solved without tarnishing the image of anyone involved.
ABC Chemicals and Dyes Pvt. Ltd.
For Nimit, ABC Chemicals and Dyes was more than a business; it was an expression of his values and of himself. He was now an old man; but in 1966, he was the first engineer from his village Chandasama, Gujarat. After completing his chemical engineering from MS University, Baroda, he had gone to Uganda to gain experience in various industries in chemicals and plastics. In 1972, when Idi Amin ordered the expulsion of Asians from Uganda, he returned to India to set up a manufacturing unit in his own village. He had dreamt of improving the quality of education in his village, develop talent, and thereby, contribute to the economy and the overall development of the village. He had gained wealth and experience from his days in Uganda, and wanted to leverage them to the fullest. During the last 42 years, he had consistently built and delivered on the same values. He had chosen a slow but inclusive growth, keeping the requirements of his village in focus. He had recruited a select group of chemical and mechanical engineers in 1972 to start the ABC Chemicals and Dyes plant. Soon, the business began to grow, and he had to invest a lot more in the plant and the machinery, and also recruit more people. In 2017, there were nearly 300 white‑collared employees and more than 1500 labourers. While a good number of employees were taken on payroll, the others were hired on contract. ABC Chemicals was the largest manufacturing set up in the district, and was well known at the national level as a medium-scale, owner-promoted company, with a reputation for decent dealings and fair employee practices.
Challenges in retention of female talent
Since the plant was situated in a remote location, retaining women employees had always been a problem. While many joined as graduate engineer trainees (nearly 33% at the entry level), only a handful stayed for more than 4-5 years; at the senior management level, the ratio was less than 1%. Marriage often took them to bigger townships where their spouses were employed. Ambitious women in their 30s left because options for career advancement were limited in a small town, and they used ABC Chemicals as their ladder for the next position. Attrition among women employees after childbirth was prevalent, or, when their children entered senior education. A select few married someone from the local community or within the office group and reached the level of General Manager; however, they too left when their children reached critical class levels between 8th and 12th standards. This was the phase where the priority of these women employees shifted from building their career to that of the child. Chandasama had a small school started by Nimit himself, which was good for primary education; but for those aspiring for courses in engineering and medical, Ahmedabad was the preferred destination, and they tended to relocate to that city. In such cases, while the men continued to work with the company, their wives often shifted to cities that offered better facilities in education.
Nimit had never paid any major attention to the fact that more women were moving out from his firm. He had fixated his focus on getting the work done, and as long as their absence did not defer team performance, he chose to remain oblivious. There were no special benefits and policies that enabled women in senior positions to manage their career and personal aspirations. The culture in the organisation was similar to that of any company in a small township. The same groups interacted professionally as well as personally, and there was only a thin boundary between the personal and professional lives. Personal issues of every household were known to all, and people cared and supported each other. Metaphorically, it was like a large extended family living together with different kitchens and living spaces. Even that was often done away with when they had any festivals or “sanjha chulha”, which was started by Nimit himself as an employee engagement exercise. Women brought gravies from their homes, and, bread was cooked centrally and shared commonly.
Nimit actively engaged with HR and created a lot of informal interaction to foster these relationships. Everything had been running really smooth. Business was going good, and the people were happy and content. Typically, he hardly ever hired candidates with high aspirations. He looked for candidates who had been brought up in small towns and were not very materialistic. Cost of living was low, and most people chose ABC because it gave them a cozy, comfortable living, and they could save more as they were spending less. Chandasama offered free air, organic food, and fresh vegetables. Though Nimit was not a great paymaster, but the cost of living was low in Chandasama, which helped him retain some members. The company averaged an attrition of 8 percent. Employee relations had never been his concern, until, a 24-year-old woman levelled allegations of sexual harassment against the Vice President‑Operations.
In her complaint, Neha Jani, an Assistant Manager in the Operations department, mentioned that Shamsher Singh, VP – Operations, had called her after her shift duty was over at 6 PM by stating that it was urgent, since a machine demanded immediate attention. When she reached the plant, the labourers were changing shifts, and therefore, there was nobody present. When she arrived at the plant, Mr. Singh had asked, “You seem to be ignoring me a lot, is there something troubling you?” “No sir,” she had replied, adding, “you said there was some problem with the machines, what is the matter?” She had further mentioned that, “In response to which, Mr. Singh held my hand and tried to embrace me…” “I heard the footsteps of labourers and was quick for the old man and could manhandle him and his overtures and run into the area where the labourers could clearly see me. This had saved me of any major embarrassment, but now, I can’t work with him and I need a posting from the department and a role change,” she had said with finality in her voice. “I don’t want any scenes and any action against him, but clearly I can’t work with him any longer.” She had said.
This was the first time in the last 42 plus years when such a complaint had been reported. The matter was extremely delicate; so far, the only grievances were about differential food rates for contractual workers, wage negotiation, etc. This was surely a sensitive allegation. The manner in which the top management handled this complaint would have further ramifications on other young women also wanting to join the company. In 2013, in accordance with the law, Nimit’s company had drafted a Prevention Of Sexual Harassment (POSH) policy. As per the policy, an internal complaints committee was constituted; but since then, this policy was never revisited, and now hardly anyone from the committee formed erstwhile was even working in the firm. The committee had an external woman member who was a lawyer and an activist with the local NGO. The six internal members were from the HR department, Legal and Operations department, CSR, Admin, and Support and Technology department. Interestingly, VP–Operations, against whom the allegation was made, was married to the GM HR, who was in Ahmedabad for a career improvement programme at the IIM campus. The other people in the committee were those who reported to VP‑Operations, either directly or indirectly. Thus, there was an obvious conflict of interest, which was felt by all. More than anything else, when Nimit critically examined women in senior positions, he had one woman as VP– Strategy, who was on child care leave since her son was appearing in IIT- JEE exams; there was GM–HR, who was married to the accused; and then the next senior most woman was an Assistant Manager. All the other women were in junior positions; there were several in GET, and there were more women in clerical positions. Apparently, there were no senior women who could chair the committee and have an independent voice and influence on this matter.
His fears were that in absence of an internal complaints committee, this complaint could either go to criminal proceedings and an FIR be filed, or it would reach the local complaints committee. Nimit found himself wrangled between a sense of loyalty for the VP–Operations and, at the same time, the need for justice. He had quietly enquired about the matter from a very trusted labourer of that shift; the labourer had agreed that Neha Madam did look flustered, but he saw nothing else. Another friend of Neha also said that while they had never experienced overtures, Mr. Singh had often complained about his ambitious wife and how he was starved for affection, and how his house and child were unattended by the wife. Even Nimit had witnessed that Mr. Singh often got drunk in parties and went home very late. Mr. Singh was often the last one to leave the party and any get together. Nimit was disappointed on how his organisation had failed in maintaining gender balance, and was confused on how to handle the issue at hand as well. He also became aware that as a small firm, he had never prioritised the formal HR processes. He quizzed himself if he had missed some crucial signals and had, therefore, been unable to pre-empt future problems. His people were like a family to him; this incident left him distrusting his own judgement and capability to be a people-centric leader.
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