NGRBC Principle 3 — Wellbeing of Employees: Disclosures, Evidence, and Audit Findings

What Principle 3 covers

The National Guidelines on Responsible Business Conduct (NGRBC) were issued by the Ministry of Corporate Affairs in 2018 and form the backbone of SEBI’s Business Responsibility and Sustainability Report (BRSR) format. Of the nine NGRBC Principles, Principle 3 covers the wellbeing of employees and workers — coverage of health and accident insurance, retirement benefits, parental leave, accessibility, equal opportunity, training, health and safety, grievance redressal, and disclosures under the POSH Act.

P3 is the second-most-scrutinised principle after P6 (Environment) in Indian BRSR practice — and it carries two of the nine BRSR Core attributes (POSH complaints and female-wages share). Internal HR and compliance teams typically own most of the P3 data; the assurance partner’s reconciliation is between the HR records and what the BRSR filing presents.

This page is the reference hub for everything Batchwise covers on P3.

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Employees vs workers — the terminology that catches everyone

BRSR Section A separates the workforce into two cohorts — employees and workers — and several Principle 3 disclosures use the same split. SEBI / ICSI guidance does not collapse this distinction into a single legal definition such as “on-roll vs contractor” — the entity must define its own boundary for each cohort and apply it consistently.

In practice, most entities frame the cohorts approximately as:

• Employees — those engaged in roles the entity classifies as managerial, supervisory, executive, or professional, generally on the entity’s payroll
• Workers — those engaged in operational and skilled-labour roles, with the contractor / direct-employment classification a documented entity choice

Several P3 indicators (wellbeing coverage, training, parental leave, complaints, etc.) are split between employees and workers in the format; not every sub-question uses the same split — refer to the BRSR format for the exact reporting structure of each indicator. The Section A workforce table also asks for a gender split within each cohort, which feeds the female-wages BRSR Core attribute calculation.

The most common first-year reporting error is inconsistency — defining the workforce one way in Section A and reporting Principle 3 indicators on a different basis. Whatever boundary the entity adopts should be disclosed in the Section A narrative and applied uniformly across all P3 indicators that use the cohort split.

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The Essential indicators (mandatory for every BRSR filer)

The BRSR format Section C, Principle 3 Essential indicators cover the items below — these are illustrative paraphrases; the SEBI BRSR format itself is the authoritative source for the exact wording and reporting structure of each indicator. Some items are reported with an employees/workers split, some with a gender split, some both, and some at the entity level — the format specifies the structure per indicator:

• Spending on wellbeing measures — total cost incurred on wellbeing of employees and workers, including the specified benefit buckets (health insurance, accident insurance, maternity, paternity, day-care). This disclosure also feeds the wellbeing-spend BRSR Core attribute described below.
• Retirement benefits coverage — PF, gratuity, ESI coverage by category
• Accessibility of workplaces — accessibility per the Rights of Persons with Disabilities Act, 2016
• Equal opportunity policy — policy disclosure and public availability
• Parental leave + return-to-work — return-to-work and retention rates after parental leave
• Grievance redressal mechanism — including the Internal Committee under the POSH Act
• Trade union / association membership — % of permanent employees and workers who are members
• Training coverage — health and safety training, skill-upgradation training, by category
• Performance and career development reviews — % covered by formal review process
• Health and safety management system — coverage and effectiveness
• Work-related incidents — Lost-Time-Injury Frequency Rate (LTIFR), fatalities, total recordable work-related injuries, high-consequence injuries
• Complaints disclosed across categories — including sexual harassment (POSH Act), discrimination, child labour, forced labour, wages, other working conditions

The wellbeing-spend, female-wages, and POSH-complaints disclosures are the three places where the BRSR Core attributes under P3 live — covered in the next section.

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The Leadership indicators (mandatory for Top 1,000)

The Leadership indicators below are mandatory disclosure for the Top 1,000 listed entities per SEBI’s BRSR Format. They are voluntary for entities outside the Top 1,000.

The “mandatory” label applies to the act of reporting. Some Leadership indicators require the entity to make an applicability judgement (e.g., transition-assistance disclosure depends on whether the entity has had restructuring during the year; value-chain-partner assessment depends on which partners the entity considers in scope). Where applicability or scope judgement is involved, the entity should disclose the basis for that judgement alongside the response — substantiated by a documented assessment process.

The Leadership indicators paraphrased:

1. Life insurance and compensatory cover for employees and workers in the event of death or disability — including the value of cover and the period for which it remains active
2. Spend on measures other than retirement benefits to support employees and workers — wellbeing programmes quantified
3. Transition assistance offered to employees on retirement, redundancy, or termination — coverage and outcomes
4. Performance and career development reviews — extending the Essential disclosure with the share of women employees / workers covered separately
5. Value chain partner assessment — % of value-chain partners assessed for respect of human rights and employee wellbeing (entity defines the in-scope partner population)
6. Corrective actions on assessment findings from the value-chain assessment

Leadership indicators are not part of BRSR Core assurance scope but form the qualitative narrative around the assured numbers. A “not applicable” against a Leadership indicator that involves applicability judgement is something the assurance partner will want to see substantiated in the entity’s documentation.

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The 3 BRSR Core attributes under P3

Three of the nine BRSR Core attributes fall under Principle 3 and require independent reasonable assurance under SEBI’s BRSR Core mandate:

Attribute	What it measures	Methodology page (when published)
Cost incurred on wellbeing measures as % of total revenue	Total spend on wellbeing of employees and workers (specified benefit buckets) ÷ total revenue from operations × 100	/methodology/spend-on-wellbeing/
Gross wages paid to female employees as % of total wages	Female-employee gross wages ÷ total employee gross wages × 100, with documented payroll-basis treatment of allowances, bonuses, retirement benefits, and ESOPs	/methodology/female-wages-disclosure/
Complaints under the POSH Act	Multi-component disclosure: total complaints on sexual harassment filed, complaints upheld, complaints pending at year-end, and complaints on POSH expressed as a percentage of female employees / workers (denominator: average of beginning and ending female employees / workers)	/methodology/posh-complaints-disclosure/

For the assurance engagement that covers these, see BRSR Core Assurance.

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Source-document evidence

The full evidence-document inventory is on Document Evidence Requirements. This section lists the P3-specific items the assurance partner needs at the start of the engagement.

Workforce composition and wellbeing coverage

• HR master records — employee and worker headcount tables with gender, contract type (permanent vs fixed-term vs contractor), age band, and disability status
• Insurance policy schedules — health, accident, life cover terms and the schedule of insured persons (matched to HR master)
• PF, gratuity, ESI deduction reconciliations — payroll register matched to monthly challans

Wages and POSH

• Payroll register for the full reporting year, broken by gender (the foundation for the female-wages BRSR Core attribute)
• Internal Committee minutes under the POSH Act covering the reporting year — every meeting’s minutes including complaints received, action taken, and disposition
• District Officer correspondence (where applicable) confirming Internal Committee composition and annual reporting
• Any external counsel correspondence on POSH matters during the year (auditor reviews for any complaints not surfaced in IC minutes)

Training and reviews

• Training attendance registers (health & safety, skill-upgradation, POSH awareness)
• Performance review completion logs

Health & safety

• LTI register signed by EHS / safety officer monthly
• Work-related fatality records (where applicable) — including FIR, hospital records, and any compensation correspondence
• High-consequence-injury records
• Third-party H&S audit reports (if any)

Parental leave

• Maternity / paternity leave register with start, end, and return-to-work dates for each instance
• Retention tracking for the 12 months following return-to-work

The single highest-value pre-engagement task: reconciling the IC register, the HR master, and the BRSR draft on POSH complaints. Three different counts that must match — and routinely don’t.

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Calculation methodology

Spend on wellbeing as % of total revenue

Wellbeing spend (%) = (Cost incurred on wellbeing measures for employees + workers)
                    ÷ (Total revenue from operations) × 100

The numerator covers the specified benefit buckets in the BRSR format — health insurance, accident insurance, maternity benefits, paternity benefits, day-care, and any other wellbeing-related cost the entity discloses under this category. The exact composition of the numerator should match what the entity declares in the Principle 3 Essential disclosure on wellbeing spend, and reconcile to the audited financials line for employee-benefit expense (or its equivalent in the entity’s chart of accounts). The denominator is total revenue from operations from the audited Statement of Profit and Loss.

Female wages share

Female wages share (%) = (Gross wages paid to female employees during FY)
                       ÷ (Gross wages paid to all employees during FY) × 100

“Gross wages” is defined per the entity’s documented payroll-basis methodology, with the basis disclosed alongside the figure. SEBI-aligned BRSR materials typically:

• Include basic pay, dearness allowance, and regular allowances
• Exclude retirement benefits (PF, gratuity, superannuation)
• Exclude ESOPs and similar equity-based compensation
• Treat bonuses differently depending on whether the entity uses an accrued or paid basis — both are defensible if disclosed and applied consistently

The split must reconcile to the audited payroll register and the same payroll basis must be applied to both the numerator (female wages) and the denominator (total wages). The reporting period is the financial year as paid (or accrued, per the entity’s basis) — not annualised salary cost or cost-to-company.

POSH Complaints — multi-component disclosure

POSH disclosure is a multi-component metric, not a single number:

• Total complaints on sexual harassment filed during the year — formally received and recorded by the Internal Committee under the POSH Act
• Complaints upheld — those for which the IC found the complaint substantiated
• Complaints pending at year-end — open as of FY-end
• Complaints on POSH as % of female employees and workers — denominator is the average of beginning-of-year and end-of-year female employees / workers per the BRSR Core methodology

Resolution outcomes (action taken, including any termination, transfer, training, or counselling) are summarised qualitatively. Names of complainants and respondents are protected per the POSH Act and the BRSR format does not require their disclosure.

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Sector context

Sector	P3 emphasis
IT services, BPO, KPO	Female-wages share is high (often 30-45%) — many of these entities lead on this metric. Workforce primarily “employees” with limited “workers” cohort. POSH disclosure is heavily scrutinised by Western enterprise customers.
Manufacturing, cement, steel	”Workers” cohort is large, often through contractor employment. The contractor / direct-employment classification choice materially affects every P3 indicator. H&S incidents (LTIFR, fatalities) are typically the most-scrutinised aspect; female-wages share can be structurally lower (5-15%) reflecting industry composition.
Banking, NBFCs	Mostly “employees” only; minimal “workers” cohort. Female-wages share comparable to IT services. POSH disclosure is high-visibility for ESG-rating agencies. Branch-level data aggregation can be the operational challenge.
FMCG, Pharma, retail	Mixed — corporate office (employees) plus plant/distribution (workers, often contractor). Gender-split data is variable in completeness across the cohorts.
Public infrastructure, utilities	Statutory entities operating with contractor workforces. Disclosure boundary on contractor workers is the single highest-judgement call in the engagement.

The sector-specific industry guides (in /industries/) cover the operational nuances per sector — those publish over Phase C Weeks 7-8.

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Common audit findings

The patterns below are common practice issues observed in BRSR Core assurance engagements, not SEBI-recognised categories of finding. They are listed because they recur and warrant pre-engagement attention:

1. Employees vs workers boundary inconsistency. Section A workforce table treats the cohorts one way; Principle 3 indicator tables treat them another. The boundary should be disclosed once and applied consistently across Section A and the relevant Principle 3 indicators. Mismatches surface immediately on reconciliation.
2. POSH complaint count mismatch between IC register and BRSR draft. Internal Committee minutes log N complaints; BRSR draft shows N-1 (or N+1). Almost always a transcription error or scope-of-period error rather than intentional under-reporting; resolved by reconciling to IC primary records.
3. Female-wages denominator misalignment. The wages denominator (total wages paid) is calculated on a different basis from the female-wages numerator — different period cut-off, different inclusion of bonuses, different treatment of fixed-term contracts. Both must reconcile to the same audited payroll register on the same payroll basis.
4. Parental leave return-to-work calculation period. The return-to-work rate is calculated on those who returned from leave during the reporting year; retention rate is typically calculated 12 months post-return. Confusion between the two measurement windows is routine and should be disclosed.
5. LTI / fatality scope on contractor workforce. When workers are contractor-engaged, whether their incidents enter the entity’s LTIFR depends on the boundary the entity has declared. There is judgement involved either way — what matters from an assurance perspective is that the scope is explicit in the disclosure and applied consistently year-on-year.
6. Training-coverage denominator basis. ”% of employees trained” can be calculated on average headcount during the year, year-end headcount, or eligible-for-training subset. This is a documentation and consistency issue rather than a SEBI-recognised category — the denominator basis should be disclosed alongside the figure and held consistent year-on-year.

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How P3 rolls up into BRSR Core Assurance

The three P3-Core attributes (Wellbeing Spend %, Female Wages share, and POSH Complaints) are the SEBI-mandated reasonable-assurance scope for this principle. The signed assurance report attests these to reasonable assurance under SAE 3000 (Revised) — India’s adoption of ISAE 3000 (Revised) — same standard as the P6 Core attributes.

The remaining P3 disclosures (Essential indicators on parental leave, H&S, complaints categories other than POSH, retirement benefits, training, etc., plus all Leadership indicators) are filed as part of the BRSR but are NOT in the Core assurance scope. Many entities still ask the assurance partner to apply limited-assurance procedures over selected non-Core P3 items where lender ESG covenants reference them — common candidates: LTIFR, parental-leave return-to-work, training coverage.

For the engagement that produces the signed BRSR Core assurance opinion, see BRSR Core Assurance. For SME suppliers being asked by their Top-1,000 listed customer to provide assured employee-wellbeing data as part of value-chain reporting, see BRSR Value Chain Verification.

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Related reading

• Document Evidence Requirements — full per-attribute evidence checklist including HR / payroll documents
• NGRBC to BRSR Metric Mapping — full P1-P9 to BRSR-format metric crosswalk
• NGRBC Principle 6 — Environment — sibling pillar (same Essential / Leadership / materiality two-level framework)
• XBRL Taxonomy for BRSR — XBRL element references for P3 disclosures
• BRSR Core Assurance — service
• BRSR Value Chain Verification — service