Penalty for non-compliance with provisions of Act

Section OverviewPending legal verification

Where the employer fails to—

constitute an Internal Committee under sub-section (1) of section 4;

take action under sections 13, 14 and 22; or

contravene any other provision of this Act or any rules made thereunder,

the employer shall be punishable with fine which may extend to fifty thousand rupees.

If any employer, after having been previously convicted of an offence punishable under this Act, commits and is convicted of the same offence, the employer shall be liable to—

double the punishment which might have been imposed on a first conviction, subject to the punishment being maximum provided for the same offence; and

cancellation of, or non-renewal of, or refusal to grant licence, withdrawal, or non-renewal, or refusal of registration, as the case may be, required for carrying on the business or activity by such employer.

Temporary structural and explanatory content only; it is not a verbatim reproduction. Complete statutory text and legal commentary will be integrated after separate legal verification.

Source: Ministry of Law and Justice, Government of IndiaRetrieved: 2024-01-15

Plain Language

Employers who fail to constitute an Internal Committee, act on committee recommendations, or otherwise breach the Act can be fined up to fifty thousand rupees.

Repeat offenders face doubled fines and the risk of losing business licences, registrations, or renewals — a consequence that goes beyond financial penalty into operational survival.

The penalty covers not just IC constitution failures but any contravention of the Act or the rules made under it.

Why It Matters

Section 26 makes governance neglect a business risk, not just an HR issue. The fine is modest, but the licence and registration consequences for repeat violations are severe.

This is the Act's primary enforcement mechanism — without it, compliance would be voluntary.

The doubled-penalty provision for repeat violations signals that the law expects employers to correct non-compliance after the first offence.

Practical Example

Scenario: A company with 50 employees has not constituted an Internal Committee despite being required to do so under Section 4.

Outcome: The employer is liable for a fine of up to fifty thousand rupees under Section 26(a).

Scenario: An employer was previously fined for failing to constitute an IC. After conviction, the employer still does not constitute one and is prosecuted again.

Outcome: The employer faces a doubled fine and risks cancellation or non-renewal of business licences or registrations.

Scenario: An Internal Committee recommends disciplinary action against a respondent under Section 13, but the employer takes no action.

Outcome: Failure to act on committee recommendations under Section 13 is a penalty-triggering breach under Section 26(b).

Who Must Act

employer

Constitute the Internal Committee as required under Section 4.
Act on committee recommendations under Sections 13, 14, and 22 within the prescribed timelines.
Comply with all provisions of the Act and the rules made thereunder.
Understand that repeat non-compliance carries doubled penalties and business-licence consequences.

Compliance

✓

Constitute Internal Committee under Section 4

Actor: Employer · Rule: Section 26(a)

✓

Act on committee recommendations under Sections 13, 14, and 22

Actor: Employer · Rule: Section 26(b)

✓

Comply with all provisions of the Act and rules

Actor: Employer · Rule: Section 26(c)

Common Mistakes

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Assuming the penalty is only about the fine — repeat violations risk business-licence consequences that can shut down operations.

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Treating non-compliance as a one-time fix — the doubled-penalty provision means the second offence is significantly more costly.

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Believing that only IC constitution failure triggers penalties — any contravention of the Act or rules can be penalised.

Source & Status

This page contains temporary structural and explanatory content, not a verbatim reproduction of the Act.

Source: Ministry of Law and Justice, Government of India

Publication status: Temporary content pending separate legal verification