RECENT INTERNATIONAL TRENDS IN EMPLOYMENT GENDER LAW HANDY GUIDE

Transcription

1 RECENT INTERNATIONAL TRENDS IN EMPLOYMENT GENDER LAW HANDY GUIDE

2 Background Campaigns for workplace diversity and equality have been given a boost in recent times. Academic studies, media interest in high profile cases and legislative change have created worldwide focus on the subject. Diversity has many faces and its realisation requires persistence and a multidimensional approach. Some countries focus on the elimination of racial discrimination (e.g. the US), or on initiatives to increase the representation of disabled employees (e.g. Asia Pacific), whereas others concentrate on gender parity (e.g. the EU). Economics plays its part. For example, in April 2018, the McKinsey Global Institute published a report on the status quo of gender equality in Asia Pacific countries. The report concludes that advancing women s equality could potentially add $4.5 trillion to these countries collective annual GDP in 2025, which would mean a 12% increase over business-as-usual. In 2017, the World Economic Forum benchmarked 144 countries and reached the same conclusion, not only for Asia Pacific but worldwide: gender parity is fundamental to whether and how economies and societies thrive. This is equally true for the benefits of including all ethnic groups and people with disabilities. Having women in leadership positions is often seen as a symbol of an attitude to diversity. Gender quotas Quotas serve as regulated means of removing inequities and female under-representation and promoting women s economic interests. Having women in leadership positions is often seen as a symbol of an attitude to diversity. It creates role models and a balance of perspectives on boards. Quotas have been used primarily for corporate boards; and Luxembourg recently introduced a requirement that 40% of politicians on lists for legislative and European elections should be female. Parties that do not comply with the quota receive significantly less state funding. Norway Norway became the first country in the world to enact a legally mandated gender quota for a wide spectrum of company boards. The Norwegian Public Limited Liability Companies Act came into force in The Act states if the board of directors has nine members, each sex shall be represented by at least four members, and if the board of directors has more members, each sex shall represent at least 40% of the members of the board. If a company does not comply with the quota rules it will receive a fine, or be denied registration as a business enterprise and can even be subject to forced dissolution by the courts. The measures taken have proved highly effective; before 2003, women represented only 6.8% of board directors (of publicly owned companies), by 2010 the percentage had gone up to 40.3%. Programmes to tackle gender equality comprise a wide range of aspects, e.g. alignment of paid leave and positive discrimination. In responding to cultural change, growing social awareness and political pressure, many EU and non-eu countries have implemented new legislation in recent years. There are, however, three policy areas that stand out in terms of development speed and results: gender quotas, pay equity regulation, and sexual harassment, the latter recently amplified by the #metoo movement. We outline these recent developments and the legal and practical implications in a selection of jurisdictions.

3 Iceland Another example of a successful implementation of gender quotas on corporate boards is Iceland. According to the 2017 World Economic Forum s report, the island is a frontrunner on gender equality for the ninth year in a row, and, according to EU data, Iceland is the world leader at including women in the labour force with over 80% participation in Iceland has even set up the Centre for Gender Equality to administer its most comprehensive gender equality legislation, the Act on Equal Status and Equal Rights of Women and Men, last amended in For gender quotas, the law explicitly puts an obligation on employers and trade unions to put both women and men on an equal footing on the labour market with particular emphasis on achieving equal representation of women and men in managerial and influential positions. The Acts on Public and Private Limited Companies, last amended in 2010, provides that managing boards of companies with more than 50 employees must consist of at least 40% of both sexes. Unlike in Norway, however, the law does not provide sanctions for non-compliance. Pay equity regulation Equal pay for both women and men is another hotly debated topic in most countries, as epitomised by the UK s BBC gender pay gap scandal which arose in summer There are two main types of legislative intervention on equal pay. The first is a requirement that women and men working in the same company performing equal work must receive equal pay. The second is the measurement of the gender pay gap to show the difference between average salaries across an organisation and the labour market as a whole. The causes of the gender pay gap are complex. Gaps will be widest in industries or management tiers that are male-dominated and part-time work is mostly carried out by women. While most countries are adopting laws to close the gender pay gap, progress is very slow. According to the World Economic Forum s Global Gender Gap Report 2017, in 2016 it would have taken women 170 years to achieve gender parity, whereas the 2017 figure is 217 years. Germany Other European countries have followed Norway and passed legislation requiring gender quotas, including Belgium, France, Italy, the Netherlands and Spain. In Germany the Law for Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector came into force in The law requires public authorities and listed companies to allocate 30% of seats on non-executive boards to women. If a company fails to comply with the quota it must keep the seats empty until they are filled with women, effectively preventing the board from meeting the quorum. Unlike in Norway or France, there are no further sanctions like fines. Examples UK and Slovakia In the UK, there is an ongoing resistance to statutory gender quotas but gender diversity targets (non-binding) are becoming more common in certain industries. Another example is Slovakia, where there are no gender quotas in law. Again, like the UK, there is increased awareness and international companies based in Slovakia are influencing attitudes by applying global rules on how to increase the number of women on boards and higher management positions.

4 Iceland According to the World Economic Forum s 2017 report, Iceland is, again, ranked the best country in the world when it comes to equal pay, followed by Norway and Finland. The Icelandic Government has even pledged to eradicate gender pay gap by To achieve this, the country s Parliament passed new legislation in 2017, which came into effect on 1 January 2018, making it mandatory for all companies and institutions with over 25 employees to obtain a Pay Equity Certification. Workplaces with more than 250 employees have until the end of 2018, smaller firms until the end of Spain and Germany By contrast, Spain is a country with one of the largest gender pay gaps in Europe. However, a new bill on pay equity and salary transparency is planned. A new law was introduced in Germany in 2017 to promote pay transparency between women and men. It introduced a right to request information regarding the gender pay gap in companies with over 200 employees. Because of its reduced scope it has been criticised for being a toothless tiger. Sexual harassment at work Sexual harassment or unwelcome sexual attention is unacceptable. Efforts to reduce sexual harassment in the workplace were recently amplified in 2017 through the #MeToo movement. The sexual misconduct allegations against Harvey Weinstein launched a worldwide increase in legislative measures designed to tackle sexual harassment. Germany and others Following on from an EU directive on sexual harassment in 2002, some European countries addressed the problem by placing an affirmative duty upon employers to prevent and redress such behaviour. Germany enacted the general Act on Equal Treatment in 2006 to protect employees from sexual harassment from co-workers, superiors, and third parties (i.e. customers). The #MeToo movement led to employers adjusting policies and implementing routines for dealing with sexual harassment in the workplace in most countries, including the UK and Norway as well as Peru, the Netherlands, and Australia. UK and US The UK equivalent, the Equality Act 2010 (Gender Pay Gap Information) Regulation, introduced a compulsory gender pay gap reporting as of 5 April Like in Germany, this only applies to a small number of companies and public sector organisations with over 250 employees (circa 34% of employees). In November 2017, the European Commission released an action plan on equal pay that lays out policies to mandate sanctions and compensation for victims of unequal pay, and legally binding information rights for employees. Against the backdrop of Brexit, the future of UK anti-gender pay gap legislation is uncertain: the UK Government has been criticised for trying to wriggle out of its commitment on equal pay. Indeed, backward steps are not impossible, as the example of the US shows. Under President Donald Trump, some of the former US Government s actions to achieve gender equality in the workplace have been revoked, for example, in 2017, the President signed an executive order that revoked the Fair Pay and Safe Workplaces rule that was enacted in 2014.

5 Australia Australian courts recently reinforced their zero tolerance position against sexual harassment. Courts and tribunals are continuing to award significantly higher general damages for sexual harassment claims than in the past. There seems to be a more fundamental change in Australian culture. The law provides a range of penalties and covers harassment not only from co-workers and superiors but also third parties, including clients and customers. India and China Even countries that have not historically focused on sexual harassment policies have passed legislation in recent years. In India the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act was enacted in 2013 to protect women from harassment (unwelcome advances, comments and conduct) at work. The law provides a range of penalties and covers harassment not only from co-workers and superiors but also third parties, including clients and customers. In China, the Law on the Protection of Women s Rights and Interests was amended in 2012 and gives victims of harassment a mechanism to redress their claims under Chinese tort/delictual law. Unless an employer is able to produce a corporate anti-harassment policy, they may be liable for negligently or even intentionally failing to stop harassment that they knew or should have known could occur. Join the conversation at our employment blog brodies.com/blog/employment

6 Comparison table Due to raising awareness and political pressure, a number of countries have adopted legislation to achieve gender equality to a greater or lesser extent. The following table provides an overview of the legal developments in a selection of jurisdictions. JURISDICTION GENDER QUOTAS PAY EQUITY WORKPLACE SAFETY NORWAY Public Limited Liability Companies Act 2003; mandatory gender quotas for publicly listed companies; non-compliance leads to fine, denied registration, dissolution. Gender Equality Act requires objective evaluation of the value of jobs. The idea is that this shall produce a determination of relative value free from gender bias. Equality and Anti-Discrimination Act, entry into force 1 January 2018 protects against all kinds of discrimination, with the particular objective of improving the position of women and minorities. ICELAND Act on Public Limited Companies 2010, at least 40% (no sanctions for non-compliance); see also the Law on Equal Status and Equal Rights of Women and Men (last amended 2017) with Center for Gender Equality. Pay Equity Certification Law 2017: companies over 25 employees have to obtain government certification for their equal-pay policies. Act on Equal Status and Equal Rights of Women and Man 2017 provides regulations against sexual harassment. GERMANY Law for Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector 2016, 30% quota, sanction: empty seats, potentially jeopardising quorum Law on the promotion of pay transparency between women and men; mandatory employee information right regarding gender pay gaps in companies with over 200 employees. Act on Equal Treatment in 2006 to protect employees from sexual harassment from co-workers, superiors, and third parties. SLOVAKIA No gender quotas in law. In practice, especially international companies have internal rules/initiatives applicable also in Slovakia on how to increase pool of women candidates for higher management positions. Slovak Labour Code states that wage conditions must be agreed without any form of sex discrimination (equal work and work of equal value). Anti-Discrimination Act (last amended in 2014).

7 JURISDICTION GENDER QUOTAS PAY EQUITY WORKPLACE SAFETY UK On-going resistance to Board quotas but gender diversity targets now common place. Equality Act 2010 (Gender Pay Gap Information) Regulation 2017, compulsory gender pay gap reporting for companies with over 250 employees. Sexual harassment is recognised as a form of discrimination under the Equality Act 2010 and is therefore against the law. Most organisations and companies have proper procedures for dealing with sexual harassment and complaints. AUSTRALIA No quotas at law. Workplace Gender Equality Act 2012 requires private employers with over 100 employees to submit yearly report to Workplace Gender Equality Agency. The Fair Work Amendment (Gender Pay Gap) Bill 2015 was brought before the Senate for debate in March Courts and tribunals adopting zero tolerance position against sexual harassment; Anti-Harassment laws. INDIA Companies Act 2013: One Woman Quota on corporate boards; voluntary Corporate Boards Mentorship Program, founded in Equal pay for equal work, wage discrimination between permanent and temporary employees disallowed (Supreme Court, 2016); not specifically to gender pay equality. India s Gender Gap is high despite Equal Remuneration Act Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act was enacted in 2013 to protect women from harassment (unwelcome advances, comments and conduct) at work. CHINA One of the lowest rates of women-held board seats. Equal pay for equal work, see the 2012 Decision regarding the Modification of Employment Contract Law (applies to dispatched personnel, not specifically to gender pay equality). Law on the Protection of Women s Rights and Interests was amended in 2012 and gives victims of harassment a mechanism to redress their claims under Chinese tort/delictual law (legal presumption of negligent behaviour unless corporate anti-harassment policy can be produced).

8 Outlook In April 2018, the McKinsey Global Institute reached the conclusion that from an economic perspective, trying to grow without enabling the full potential of women is like fighting with one hand tied behind one s back. However, data seems to suggest that despite all the efforts made, gender equality globally seems to be decreasing again. As for equal pay and promotion opportunities, a prominent theory as to why this might be cites gender stereotypes as a possible explanation. Gender stereotypes of the man as the provider and the woman as the caregiver seem to survive any attempt at equalisation. This results in men still not participating equally in child care and the assumption that women are not interested in a career once they have had children. Considering the relatively short time that women have been allowed to participate and be heard at all, patience is the uncomfortable but realistic recommendation. Nonetheless, this is not an excuse to twiddle thumbs, and the range of legislative changes outlined in this paper permits the hope that we are moving in the right direction. Progressive legislation and an increasingly popular trend of unconscious or subconscious bias training have the potential to significantly change the future of Employment Gender Law. Appendix legislative overview If the board of directors has six to eight members, each sex shall be represented by at least three members. If the board of directors has nine members, each sex shall be represented by at least four members, and if the board of directors has more members, each sex shall represent at least 40 percent of the members of the board. The rules in no. 1 to 4 apply correspondingly for elections of deputy members of the board of directors. The first paragraph does not apply to members of the board of directors who have been elected among the employees pursuant to 6-4 or 6-37 first paragraph. When two or more members of the board of directors as mentioned in the first paragraph are elected, both sexes shall be represented. The same applies to deputy directors. The provisions in the second and third sentence do not apply if one of the sexes is represented by less than 20 percent of the total number of employees in the company at the time of election. The Icelandic Act on Equal Status and Equal Rights of Women and Men The Icelandic Act on Equal Status and Equal Rights of Women and Men was first enacted in The Centre for Gender Equality is set out in Articles 3 f. Article 1 states the aims of the Act: Gender Quota The Norwegian Public Limited Liability Companies Act The Norwegian Public Limited Liability Companies Act was first enacted in It applies to, as the Act title states, to public limited liability companies (public LLCs). Its counterpart is the Private Limited Liability Companies Act of The acts have a comprehensive, near identical structure, and most of the regulations are the same, however, the clause on gender quotas is found exclusively in the Public Limited Liability Companies Act as of The relevant clause 6-11a (Requirement regarding the representation of both sexes on the board of directors) reads: On the board of directors of public limited liability companies, both sexes shall be represented in the following manner: If the board of directors has two or three members, both sexes shall be represented. If the board of directors has four or five members, each sex shall be represented by at least two members.

9 The aim of this Act is to establish and maintain equal status and equal opportunities for women and men, and thus promote gender equality in all spheres of the society. All individuals shall have equal opportunities to benefit from their own enterprise and to develop their skills irrespective of gender. This aim shall be reached by the following means, amongst others: observing gender equality perspectives and working towards gender mainstreaming in policy-making and decision-taking in all spheres of society, working to secure equal influence of women and men in society, specifically improving the position of women and increasing their opportunities in society, working against wage discrimination and other forms of gender-based discrimination on the employment market, enabling both women and men to reconcile their work and family life, increasing education and awareness-raising on gender equality, analysing statistics according to gender, increasing research in gender studies, working against gender-based violence and harassment and changing traditional gender images and working against negative stereotypes regarding the roles of women and men. In notifications regarding Boards to the Register of Companies information regarding sex ratios on a Board shall be detailed. The Icelandic Public and Private Limited Companies Legislation The Public and Private Limited Companies legislation was first enacted in 1995 and Amendments made in 2010, added regulation on sex ratios on corporate boards to both Acts (Private and Public Companies). Article 63, para. 1 of the Act on Public Limited Companies read as follows: employees generally on an annual basis each sex shall be represented on the Board when the Board Companies it shall be ensured that sex ratio be not lower than 40%. The same applies to sex ratios among Reserve Directors in such Companies, but ratios on the Board and the Reserve Board shall though in total be as equal as possible. In case a satisfactory result will not be reached a necessary amendment can be approved with a new decision of the shareholders' meeting, but a provision regarding this matter shall be entered into the Articles of Association of a Company. In notifications regarding Boards to the Register of Companies information regarding sex ratios on a Board shall be detailed. In Public Limited Companies with more than 25 employees generally on an annual basis information regarding sex ratios among employees and the management of the Company shall also be detailed. Article 39, para. 1 of the Act on Private Limited Companies read as follows, nearly identical: The Board of Directors of a Private Limited Company shall consist of at least three persons, unless there be four or fewer shareholders, then it is sufficient that the Board consist of one or two persons. In case the Board of Directors of a Company consists of one person, one Reserve Director at least shall be selected. When members of the Board are two or three in a Company with more than 50 employees generally on an annual basis each sex shall be represented on the Board and when members of the Board of Directors are more than three in such Companies the sex ratio shall not be lower than 40%. The same applies to sex ratios among Reserve Directors in such Companies, but the ratios on the Board and the Reserve Board shall in total be as equal as possible. In case a satisfactory result is not reached, a necessary amendment can be approved with a new decision of the shareholders' meeting, but a provision regarding this matter shall be entered into the Articles of Association of a Company. In notifications regarding Boards to the Register of Companies information regarding sex ratios on a Board shall be detailed. In Private Limited Companies with more than 25 employees generally on an annual basis information regarding sex ratios among employees and the management of the Company shall also be detailed. A Public Limited Company's Board of Directors shall consist of a minimum of three persons. On Boards of Directors of Official Public Limited Companies and Public Limited Companies with more than 50

10 The German Law for Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector In 2015, the German Bundestag adopted the Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector Act, the so called women s quota ( Frauenquote ). The act provides for an obligation of companies to determine target figures for the proportion of women (this primarily includes German stock corporations, European companies and German limited liability companies). Currently, the German Government discusses a Draft Act to Promote Transparency in Pay Structures ( Gesetzesentwurf der Bundesregierung, Entwurf eines Gesetzes zur Foerderung der Transparenz von Entgeltstrukturen ). Pay equity regulation the difference between the mean hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees (see regulation 8); the difference between the median hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees (see regulation 9); the difference between the mean bonus pay paid to male relevant employees and that paid to female relevant employees (see regulation 10); the difference between the median bonus pay paid to male relevant employees and that paid to female relevant employees (see regulation 11); the proportions of male and female relevant employees who were paid bonus pay (see regulation 12); and the proportions of male and female full-pay relevant employees in the lower, lower middle, upper middle and upper quartile pay bands (see regulation 13). The Icelandic Legislation on Equal Position and Equal Rights of Women and Men Iceland first passed legislation on equal pay as early as 1961; however, the gender pay gap persisted. In 2017, the Icelandic Parliament passed an amendment to the 2008 legislation on equal position and equal rights of females and males, making it mandatory for all firms and institutions with 25 or more employees (on a full time yearly basis) to obtain a Pay Equity Certification, as of 1 January The largest workplaces (with 250 or more employees) have until 31 December 2018 to obtain their certification whereas smaller workplaces will have more time to comply with the new legislation (e.g. those with employees have until 31 December 2021). The required certification is based on the ISO Equal pay management system - Requirements and guidance (its Icelandic version goes by the name ÍST 85:2012). The UK Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 introduced a compulsory gender pay gap reporting as of 5 April The information that must be published is summarised in clause 2.-(1): A relevant employer must publish, for 2017 and each subsequent year, the following information:

11 Sexual harassment at work EU Directives The EU Directive 2002/73/EC of the European The EU Directive 2002/73/EC of the European Parliament on the implementation of the principle of equal treatment of men and women was replaced by the Directive 2006/54/EC (recast). Under (6) and (7) it states that: Harassment and sexual harassment are contrary to the principle of equal treatment between men and women and constitute discrimination on grounds of sex for the purposes of this Directive. These forms of discrimination occur not only in the workplace, but also in the context of access to employment, vocational training and promotion. They should therefore be prohibited and should be subject to effective, proportionate and dissuasive penalties. In this context, employers and those responsible for vocational training should be encouraged to take measures to combat all forms of discrimination on grounds of sex and, in particular, to take preventive measures against harassment and sexual harassment in the workplace and in access to employment, vocational training and promotion, in accordance with national law and practice. According to clause 12, the employer has the duty to take the necessary measures to ensure protection against discrimination included in the Act. The Indian Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act The Act was enacted in It aims to ensure that employers take every necessary step to ensure that women are not subject to sexual harassment. In addition, according to clause 4, Every employer of a workplace shall, by an order in writing, constitute a Committee to be known as the Internal Complaints Committee to deal with complaints on sexual harassment. It also provides for that at least one-half of the total members so nominated shall be women. Download sexual harassment of woman act & rules As a reminder, an EU directive is a legal act which requires EU Member States to achieve a particular result without dictating the means of achieving that result. It can be distinguished from regulations, which are self-executing and do not require any implementing measures. The German Act on Equal Treatment The German Act of Equal Treatment ( Gleichbehandlungsgesetz ) of 2006 protects employees from sexual harassment from co-workers, superiors, and third parties. Clause 3 (4) includes sexual harassment in the list of prohibited discrimination: Sexual harassment shall be deemed to be discrimination in relation to Section 2(1) Nos. 1 to 4, when an unwanted conduct of a sexual nature, including unwanted sexual acts and requests to carry out sexual acts, physical contact of a sexual nature, comments of a sexual nature, as well as the unwanted showing or public exhibition of pornographic images, takes place with the purpose or effect of violating the dignity of the person concerned, in particular where it creates an intimidating, hostile, degrading, humiliating or offensive environment.

12 The Chinese Law on the Protection of Women s Rights and Interests The Act was amended in 2012 and gives victims of harassment a mechanism to redress their claims under Chinese tort/delictual law. The newly added Article 40 states that Sexual harassment against woman is prohibited. The victims have the right to lodge complaint to unit or organ concerned. Article 58: Any violation of a stipulation prescribed in this law, c results in sexual harassment to a woman, and constitutes a violation of public order of administration, the victim can ask the public security organs to impose administrative punishment, and also bring civil litigation to the People's Court. Download protection of women s rights PDF Key contact Joan Cradden PARTNER +44 (0) joan.cradden@brodies.com Join the conversation at our employment blog brodies.com/blog/employment

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