Section 4 of the Industrial Relations Code, 2020 requires every industrial establishment employing 20 or more workers to constitute one or more Grievance Redressal Committees [1]. The BRSR format requires every listed company to disclose whether a grievance redressal mechanism exists for each stakeholder group, how many complaints were filed during the year, and how many remain pending at year end [2]. Principle 5 of the National Guidelines on Responsible Business Conduct (NGRBC) goes further: it requires companies to describe the internal mechanisms in place to redress grievances related to human rights issues [3].
Between the labour code and the securities regulator, the legal requirement is clear. A grievance mechanism must exist. It must be reported on. The data must be disclosed publicly.
What neither law specifies in sufficient detail is what a functioning grievance mechanism actually looks like in practice. That gap is where most companies get stuck. They build the policy. They tick the disclosure box. They do not build the system.
What BRSR Actually Asks For on Grievances
BRSR captures grievance data in two places.
The first is Section A, Question 25 (renumbered from Q23 in the updated July 2023 BRSR format). This is a table-format disclosure covering all nine NGRBC Principles. For each stakeholder group, the company must disclose: whether a grievance redressal mechanism is in place (Yes/No), a web link to the grievance redress policy, the number of complaints filed during the current financial year, the number of complaints pending resolution at year end, and remarks. The stakeholder groups listed include communities, investors (other than shareholders), shareholders, employees and workers, customers, and value chain partners [2].
The second is within the Principle 5 disclosures (human rights). The BRSR asks: “Is there a mechanism available to receive and redress grievances for the following categories of employees and workers?” The company must state Yes or No for permanent employees, other-than-permanent employees, permanent workers, and other-than-permanent workers, and give a brief description of the mechanism [2]. This is the disclosure that separates companies with real grievance systems from those with paper policies. A “Yes” followed by a two-line description of a suggestion box or an email address is not what a third-party assessor considers a functioning system.
Under BRSR Core, these disclosures are now subject to assessment or assurance for the full top 1,000 listed companies by market capitalisation from FY 2026-27 [4]. An assessor reviewing grievance data does not just verify that a number was reported. They check whether the mechanism that generated the number is real, documented, and operating. If a company reports zero grievances, the assessor asks why: is it because no grievances exist, or because the mechanism does not function?
The Legal Baseline: What the Industrial Relations Code Requires
The Industrial Relations Code, 2020, which came into effect on 21 November 2025, sets the statutory floor for grievance mechanisms in India [1][5].
Section 4 mandates that every industrial establishment employing 20 or more workers must constitute one or more Grievance Redressal Committees (GRCs). The GRC must have equal representation from the employer and the workers, with a maximum of 10 members. There must be adequate representation of women workers in proportion to their share of the total workforce. An aggrieved worker may file a grievance with the GRC within one year from the date the cause of action arises. The GRC is required to complete proceedings within 30 days of receiving the application [1].
If the grievance is not resolved within 30 days, or the worker is unhappy with the GRC’s decision, the worker may file with the conciliation officer through their trade union within 60 days [1].
This is the statutory minimum. It applies to factories, workshops, and other industrial establishments. Many mid-sized companies have constituted GRCs to comply with the law. Very few have connected the GRC to a governance system that tracks, documents, escalates, and reports on the data the GRC produces. The GRC exists. The evidence trail behind it does not.
For exporters that are not covered by BRSR (because they are not listed), the statutory GRC requirement still applies if they employ 20 or more workers. And buyer ESG audits ask about grievance mechanisms regardless of whether the company files a BRSR.
The Difference Between a Grievance Form and a Grievance System
A grievance form is a document. It may be a physical complaint form available at the HR office. It may be an email address published on the company intranet. It may be a suggestion box mounted near the canteen.
A grievance system is an operating architecture with five defined components:
1. Channel design.
How does a worker submit a grievance? Through which channel? Is the channel accessible to permanent employees, contract workers, and temporary workers? Is it available in the languages the workforce speaks? Can a worker submit a grievance without going through their supervisor (this matters when the grievance is about the supervisor)? Is there an option for anonymous submission?
2. Intake and documentation.
When a grievance is received, what happens? Is it logged in a register or system with a unique reference number, a date stamp, the category of complaint, and the identity or anonymous identifier of the complainant? Or does it go to the HR manager’s inbox and stay there until someone remembers to follow up?
3. Workflow and timelines.
What is the defined path from intake to resolution? Who is responsible for investigation? What is the committed response time? The Industrial Relations Code specifies 30 days for GRC proceedings [1]. The UN Guiding Principles on Business and Human Rights (Principle 31) list “predictability” as one of eight criteria for an effective grievance mechanism: the parties must know what to expect in terms of procedure and timeframe [6]. A governance-grade system defines these timelines explicitly and documents adherence to them.
4. Escalation triggers.
What happens when a grievance is not resolved within the committed timeframe? What happens when a grievance involves a serious allegation (harassment, safety violation, wage theft)? Who is notified? At what point does leadership become involved? A system without escalation triggers has no mechanism for ensuring that serious grievances reach the right level of attention.
5. Closure and documentation.
How is a resolved grievance recorded? Is the resolution documented? Is the complainant informed of the outcome? Is the closure record available for review by an assessor or auditor? A system that takes in grievances but does not document their resolution is not a functioning mechanism. It is a complaint inbox.
The UN Guiding Principles on Business and Human Rights, Principle 31, provide eight effectiveness criteria for non-judicial grievance mechanisms: legitimate, accessible, predictable, equitable, transparent, rights-compatible, a source of continuous learning, and based on engagement and dialogue [6]. These are not abstract standards. They are the criteria that buyer audit teams and third-party assessors reference when evaluating whether a grievance mechanism is real.
Five Failure Modes That Show Up in Assessment and Audit
These are the patterns that SVEGA sees across companies of all sizes, from INR 80 crore exporters to INR 3,000 crore listed manufacturers.
Failure mode 1: Zero grievances reported.
A company with 500 workers (200 of them contract workers) reports zero grievances filed in the past 12 months. An assessor or buyer audit team reads this as one of two things: the mechanism does not function, or workers do not feel safe using it. Zero grievances in a large workforce is a red flag, not a clean record. KPMG’s February 2026 analysis of NIFTY100 BRSR reports noted that companies were revising prior-year data when actual review standards were applied [7]. The absence of grievance data does not mean the absence of grievances.
Failure mode 2: Contract workers excluded.
The BRSR asks separately about mechanisms for “permanent workers” and “other-than-permanent workers.” Many companies have a functioning process for permanent employees (often through the statutory GRC). Contract workers employed through labour contractors are routinely excluded. They may not know the mechanism exists. They may not be able to access it. Their grievances may be directed to the contractor, who has no obligation to report them to the principal employer. Given that contract workers constitute 40.2% of India’s formal manufacturing workforce [8], a mechanism that covers only permanent employees covers a minority of the people working in the facility.
Failure mode 3: No documented resolution data.
The company reports 12 grievances filed. The BRSR asks how many are pending at year end. The company reports 2 pending. But when the assessor asks for the resolution records for the other 10, they do not exist in a structured form. The HR manager handled them informally. Some were resolved through conversation. Some were addressed through a process change. None of this is documented. Without closure records, the assessor cannot verify the resolution data.
Failure mode 4: No escalation path.
A grievance about delayed wages goes to the HR office. It sits there for 45 days. Nobody else in the organisation knows about it. There is no trigger that moves the grievance to a more senior person or committee when the initial response timeframe expires. There is no mechanism that brings a pattern of repeated complaints (for example, three wage-related grievances in two months) to the attention of the plant manager or the board.
Failure mode 5: No board or leadership visibility.
Grievance data appears in the BRSR at the end of the year. During the year, leadership does not see it. There is no quarterly reporting cadence, no dashboard, no structured update on grievance volumes, categories, or resolution rates. The board learns about grievance patterns only if something goes seriously wrong. This is the opposite of governance.
How to Build a Grievance System: A Step-by-Step Guide for Mid-Sized Companies
This is a practical build guide for companies that currently have a policy or a statutory GRC but do not have a functioning governance-grade grievance system.
Step 1: Map your current state.
Document what exists today. Is there a GRC? When was it last constituted? Does it have the required composition (equal representation, women’s representation)? Is there a grievance policy? Where is it published? Is it accessible to contract workers? Has any worker actually used it in the past 12 months? If the answer to the last question is no, treat that as a system failure, not a sign of workplace harmony.
Step 2: Define the channel.
Decide how workers will submit grievances. For mid-sized companies, the standard approach is to offer at least two channels: one in-person (a named person at each site, not just a suggestion box) and one written or digital (a form, an email address, or a phone number). The channel must be accessible in the language the workforce speaks. For companies with significant contract worker populations, the channel must be communicated directly to contract workers, not just to the labour contractor.
Step 3: Design the intake register.
Create a grievance register (this can be a spreadsheet for companies under INR 500 crore). Each entry should capture: a unique reference number, the date of submission, the category of grievance (wages, safety, harassment, working conditions, discrimination, other), whether the complainant is a permanent or contract worker, the site or location, and the assigned handler.
Step 4: Define the workflow.
Map the path from intake to resolution. Who receives the grievance? Who investigates? What is the committed response time (the Industrial Relations Code specifies 30 days for GRC proceedings; internal mechanisms should aim for faster)? What happens if the handler cannot resolve it? Document this workflow and make it available to anyone involved in the process.
Step 5: Set escalation triggers.
Define the conditions under which a grievance is escalated. At minimum: any grievance involving physical safety, harassment, or discrimination escalated immediately to a senior leader. Any grievance unresolved after 15 days escalated to the senior person above the assigned handler. Any pattern of three or more grievances on the same issue within a quarter escalated to leadership as a systemic concern.
Step 6: Build the closure process.
Every resolved grievance gets a closure record: the date of resolution, a summary of the action taken, and confirmation that the complainant was informed of the outcome. This record is the evidence trail that an assessor will look for.
Step 7: Establish a reporting cadence.
Grievance data should reach leadership at least quarterly. The report should include: total grievances received, breakdown by category and worker type, average resolution time, number pending, and any escalations triggered. For listed companies, this report feeds directly into the BRSR disclosure at year end. For exporters, it becomes the documentation package for buyer audits.
Step 8: Test the system.
Before a third-party assessment or buyer audit, simulate the questions the assessor will ask. Can you produce the grievance register within 48 hours? Can you show the resolution record for a specific complaint? Can you explain the escalation path? Can you demonstrate that contract workers have access? If the answer to any of these is no, the system has a gap.
How to Test Whether Your Mechanism Would Survive Scrutiny
Ask these seven questions. If you cannot answer “yes” to at least five of them, your mechanism has gaps that an assessor or buyer will find.
- Is the grievance mechanism documented in a policy that is published and accessible to all workers, including contract workers?
- Has at least one grievance been formally filed through the mechanism in the past 12 months?
- Does a register exist with reference numbers, dates, categories, and assigned handlers for every grievance received?
- Can you produce the resolution record for any specific grievance within 48 hours of a request?
- Is there a defined escalation path for unresolved grievances and serious allegations?
- Does the board or senior leadership receive grievance data at least quarterly?
- Are contract workers and temporary workers included in the mechanism, not just permanent employees?
Frequently Asked Questions about Grievance Mechanisms Under BRSR
What is a grievance mechanism under BRSR?
Under BRSR, a grievance mechanism is a formal process through which stakeholders (employees, workers, communities, investors, customers, and value chain partners) can raise complaints related to any of the nine NGRBC Principles and seek resolution. BRSR Section A, Question 25 requires listed companies to disclose whether a mechanism exists for each stakeholder group, how many complaints were filed during the year, and how many remain pending at year end [2]. Principle 5 specifically asks whether a mechanism is available for permanent and other-than-permanent workers and requires a brief description of how it operates [2].
Is a Grievance Redressal Committee mandatory under Indian law?
Yes, under Section 4 of the Industrial Relations Code, 2020, which came into effect on 21 November 2025, every industrial establishment employing 20 or more workers must constitute one or more Grievance Redressal Committees [1]. The committee must have equal representation from employer and workers (maximum 10 members), with women represented in proportion to their share of the workforce. Grievances must be resolved within 30 days [1]. Not constituting a GRC for a covered establishment can attract a penalty of up to INR 1 lakh [5].
Do contract workers have a right to use the grievance mechanism?
Yes. BRSR asks separately about mechanisms for “permanent workers” and “other-than-permanent workers,” which includes contract workers [2]. The Industrial Relations Code, 2020, which expands the definition of “worker” to include a broader range of employment categories, requires the GRC to be available for workers in the establishment [1]. From a governance standpoint, any mechanism that excludes 40% or more of the workforce (the national average for contract workers in formal manufacturing [8]) is a mechanism that covers a minority of the people actually working in the facility. Buyer audit teams specifically check whether contract workers are included.
Why is reporting zero grievances a problem?
Zero grievances reported in a company with hundreds of workers signals either that the mechanism does not function or that workers do not trust it enough to use it. A third-party assessor or buyer audit team treats zero as a red flag, not a clean record. The UN Guiding Principles on Business and Human Rights (Principle 31) include “accessibility” and “legitimacy” as effectiveness criteria for grievance mechanisms [6]. A mechanism that produces zero submissions over 12 months fails both tests.
What should a company report in the BRSR if it has no formal grievance system?
BRSR requires a Yes/No disclosure on whether a grievance redressal mechanism is in place. If the answer is “No,” this is a disclosed governance gap. Under BRSR Core assessment, a missing mechanism is a finding. Companies that currently lack a formal system should build one before their next assessment cycle. The build guide in this post covers the process from channel design to reporting cadence. A basic system can be operational within 6 to 8 weeks for a mid-sized company.
What are the eight UNGP criteria for an effective grievance mechanism?
The UN Guiding Principles on Business and Human Rights, Principle 31, lists eight effectiveness criteria for non-judicial grievance mechanisms: legitimate, accessible, predictable, equitable, transparent, rights-compatible, a source of continuous learning, and based on engagement and dialogue [6]. These criteria are referenced by buyer audit teams and ESG assessors as the benchmark for evaluating whether a company’s grievance mechanism is effective in practice. Poorly designed mechanisms can compound a sense of grievance rather than resolving it [6].
How does a grievance mechanism relate to POSH compliance?
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) requires a separate Internal Complaints Committee (ICC) for handling complaints of sexual harassment [9]. This is distinct from the general grievance mechanism required under the Industrial Relations Code and BRSR. Companies need both: the ICC for POSH complaints and a broader grievance mechanism for all other workplace complaints (wages, safety, working conditions, discrimination). BRSR reports POSH complaint data separately under Principle 5 [2].
Can a suggestion box count as a grievance mechanism?
Technically, it is a channel. But it fails most of the UNGP effectiveness criteria [6]. A suggestion box has no intake documentation, no reference number, no assigned handler, no committed response time, no escalation path, and no closure record. An assessor or buyer audit team would not consider it a functioning mechanism. The channel is one component of a grievance system. Without the remaining four components (intake documentation, workflow, escalation triggers, and closure records), the channel alone is not enough.
Talk to SVEGA About Building Your Grievance Infrastructure
SVEGA builds governance-grade grievance systems as part of the SVEGA Framework. The build covers channel design, workflow documentation, escalation protocols, reporting cadence, and assessment readiness testing.
If your current grievance mechanism is a policy document without a system behind it, a 30-minute conversation is a good starting point. Book a call at svegaconsulting.com.
