This article discusses the impact on private sector organisations of new legislation in India to protect the rights of disabled persons.

Firm: Kochhar & Co.

By: Rohit Kochhar 

The Rights of Persons with Disabilities Act, 2016 (the ‘new Act’) is a welcome legislative development. The new Act came into force on 19 April 2017. Further, the Rules were notified on June 15, 2017 (i.e. the date from which they came into force). The new Act replaces the Persons with Disabilities (Equal Opportunity Protection of Rights and Full Participation) Act, 1995 (the ‘previous Act’). The new Act implements India’s obligations under the United Nations Convention on the Rights of Persons with Disabilities, which was ratified in 2007. It has taken the Indian Parliament more than a decade to enact this legislation.

Summary of the new Act

  • The previous Act covered only seven disabilities, but the new Act covers more than 15 including dwarfism, acid attack victims, intellectual disability and specific learning disability.
  • Persons with at least 40% of a disability (referred to as ‘persons with benchmark disabilities’) are entitled to certain benefits. One benefit is that at least 4% of the total number of vacancies in Government establishments in specified categories (and 1% in certain others) must be reserved for their employment. This does not apply to private establishments.
  • The term ‘private establishment’ has been widely defined. This means the new Act will apply to a foreign organisation with a presence in India.
  • The Rules set out the procedure for dealing with complaints about discrimination.
  • Fines and penalties apply for failure to comply with the new Act. In certain cases, directors and senior officers may be personally liable.
  • Complaints about exploitation of persons with a disability can be made to the Executive Magistrate and the local police.
  • The Government may appoint a Chief Commissioner for persons with disabilities and each State Government may appoint a State Commissioner. The State Commissioners have the same powers as a civil court (under the Code of Civil Procedure, 1908) for discharging their functions.
  • Prosecutions for offences under the new Act will be triable by a Sessions Court, which is required to be notified by State Governments for each district as a ‘Special Court’.

Obligations

Even though private establishments are exempt from reserving jobs for persons with disabilities, they have other onerous obligations under the new Act.

All disabled employees have the right to equality and non-discrimination. The new Act makes it unlawful to discriminate against a person on the grounds of his or her disability unless it can be proved the discrimination is a proportionate means of achieving a legitimate aim. The head of the establishment is responsible for ensuring that this provision of the Act is not misused.

Establishments must prepare and publish an Equal Opportunity Policy (the ‘EOP’) for persons with disabilities. A copy must be registered with the State Commissioner or the Central Commissioner. It must contain the following:

  • details regarding facilities for persons with disabilities;
  • lists of posts identified for persons with disabilities;
  • training, promotion opportunities, allotment of accommodation and provision of assistive devices and barrier free accessibility.

Establishments must appoint a liaison officer to look after recruitment of persons with disabilities, and to deal with amenities for them. The appointment must be notified in the EOP.

Further, establishments must maintain records relating to persons with disabilities. They must record:

  • the number of disabled persons employed and the date of commencement of their employment;
  • the name, gender and address of the employees;
  • the type of disability that the employee(s) are suffering from;
  • the nature of work being performed by the employees;
  • the type of facilities being provided to the employees.

Establishments must produce the records for inspection if required to do so by relevant authorities.

The Rules prescribe standards about the physical environment, transport and information and communication technology applicable to disabled employees. Establishments must comply with these too.

Fines and penalties

If a person fails to comply with the new Act, the person can be fined up to INR 10,000 for the first time, and between INR 50,000 and INR five lakhs for subsequent failures.

If a company fails to comply, both the company and an individual can be held responsible. Directors, officers and managers of a company will be individually liable if it is established that the offence was committed with their consent, or is attributable to their negligence. In contrast, similar statutes in other jurisdictions adopt a persuasive approach rather than a punitive one (e.g. the UK Equality Act, 2010 and the Japan Basic Law for persons with disabilities).

Failure by an organisation to provide required information, documents or records is an offence. The organisation can be fined INR 25,000 for each offence with an additional fine of INR 1,000 for each day of continuing failure or refusal.

A person commmits an offence under the new Act if the person insults or intimidates a disabled person, within public view, with the intention of humiliating the person. This applies to actions within a workplace. This is punishable by imprisonment for between six months and five years and a fine.

Critique

Some provisions of the new Act and Rules introduce ambiguity. For instance, private companies are not required to hire persons with disabilities but section 35 refers to the appropriate Government providing incentives to employers in the private sector to ensure that at least 5% of their workforce consists of persons with disabilities. Use of the term ‘ensure’ is incongruous with the fact that it is not mandatory for private companies to hire persons with disabilities, much less reserve 5% of their jobs for them. To date, no such incentives have been notified under the new Act, the Rules or any subsequent circular published by the Central Government or the State Government.

Under the Rules, the ‘head of the establishment’ is responsible for ensuring that persons with disabilities are not denied their rights and benefits. While the term ‘head’ is not defined under the new Act, by general rules of interpretation, the ‘head’ would be the managing director or the Chief Executive Officer (CEO). This is like the concept of ‘occupier’ under the Factories Act, 1948. Under that Act, the CEO (or a designated director) is responsible for compliance. This has resulted in serious civil and criminal sanctions for that individual, sometimes in circumstances beyond their control.

When legislating about corporate liability, Parliament should consider building in greater flexibility for private companies. They should allow them to determine the officers who are responsible for complying with statutory obligations. The head of the organisation need not always be automatically held responsible for unlawful activity within the company, particularly when he or she is not personally responsible for it. Addressing this issue would help meet India’s professional goal of ‘ease of doing business in India’.

Another cause for concern for private companies is the level of penalties imposed by the new Act. These expose directors and senior officers of private companies to legal liabilities for even minor breaches. Potentially, these could be misused in many circumstances.

Further, the sections imposing fines are widely worded. Fines can be imposed for even routine, or inadvertent, lapses. This could make private companies vulnerable to coercion and harassment at the hands of the Government officials.

Imposing criminal liability punishable by imprisonment for acts of ‘insult’ or ‘intimidation’ is severe and prone to abuse. This provision could be misused because the terms “insult” and “intimidate” are not defined.

Conclusion

While private establishments are exempt from the legal obligation of hiring persons with disabilities, the new Act still imposes serious obligations. There are high fines and penalties for contravention of the new Act. Foreign companies with Indian branches and subsidiaries may not expect such onerous obligations, and should be particularly cautious to ensure they comply.

Overall, the new Act and the Rules feel like an attempt by government to over-regulate. The legislation does not fit with the Modi Government’s philosophy of ‘Minimum Government and Maximum Governance’. While upholding the legal rights and interests of disabled persons, the legislature could have chosen a path more persuasive than punitive.