Workplace diversity key to attracting and retaining staff

Out-Law Analysis | 02 Nov 2022 | 4:27 pm |

Diversity is becoming an increasingly important value for modern workplaces. Both businesses and their employees profit from a diverse workforce and an anti-discriminatory working environment.

Diversity is becoming an increasingly important value for modern workplaces. Both businesses and their employees profit from a diverse workforce and an anti-discriminatory working environment.

Diverse management teams have been proven to lead to better results in problem solving, research and development. It is a key advantage in attracting qualified employees and increasing employee satisfaction as an attractive employer.

Diversity in the workplace influences the management of a business. The management will aim to attract talent from diverse backgrounds and origins to the workforce, regardless of sexual orientation, gender identity, age, religious or cultural practices or disabilities. Managers will also aim to create a working environment free from discrimination.

Separately, discrimination and unequal treatment can be reasons why employees leave their jobs, so avoiding these pitfalls can help reduce staff turnover and associated costs. Discrimination at the workplace can easy to measure, such as through remuneration, or take more subtle but equally or more damaging forms, such as the restriction of promotion opportunities and access to vacancies. It also pervades the relationships that are established within the business. One might think that the company is not directly responsible for the behavior of its employees, but permissiveness, lack of awareness and sanctions can greatly modify certain dynamics.

  • Germany

    German labour law promotes diversity in the world of employment through various regulations, such as labour and social laws on the equality of women and men, of part-time and full-time employees, and of people with and without disabilities.

    Equal treatment laws

    • The principle of equal treatment is anchored in the German constitution.
    • Based on Article 3 of the Constitution, there is the principle of equal treatment under labour law. The principle of equal treatment under labour law states that the employer may not treat any individual employee less favorably than comparable employees for arbitrary reasons when taking favorable measures towards its employees, unless there is an objective reason.
    • There are certain special equal treatment or discrimination prohibitions in German labour law, for example for part-time employees.
    • In addition, there has been implemented the General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz), which is the uniform and central set of regulations in Germany for implementing the four European anti-discrimination directives.
    • The aim of the law is to prevent or eliminate discrimination on grounds of racial or ethnic origin, gender, religion or belief, disability, age or sexual identity. Any form of discrimination is covered by the law: direct and also indirect discrimination, harassment and the instruction to discriminate.
    • Legal consequences of violations can include claims for compensation.

    Rights of disabled employees

    • Germany’s social law regulates many rights of severely disabled employees in the 9th Social Code (9. Sozialgesetzbuch).
    • Among other things, the employer must organise the employment of disabled persons in such a way that they can use and develop their skills and knowledge as much as possible. This affects for example working hours, working overtime and additional leave.

      A notice of termination requires a prior approval of an authority in case of disabled employees.

    • To make it easier for severely disabled people to participate in working life, employers who have 20 or more workplaces are obliged to fulfill a certain quota. The exact quota depends on the size of the business. Alternatively, companies can pay a so-called compensation charge if they fail to meet their quota.

    Quotas

    • In areas where female or male employees are strongly underrepresented, there has been a discussion whether a quota could help to improve the gender balance. However, as of today, there is no general quota for employers to employ a certain number of women in Germany. Companies including EON, BMW, Daimler, Bosch and Siemens have, however, adopted voluntary quotas aimed at increasing the number of women in leading positions.
    • Supervisory boards of companies that are both listed and subject to equal codetermination must meet a gender quota of 30%.
    • Since 2021, new measures are in place to increase the proportion of women on the management bodies of listed companies. For listed stock companies with equal codetermination and a board of more than three people, there is an obligation to fill at least one board seat with a person of the underrepresented sex.

    Renumeration transparency

    • The Pay Transparency Act aims at equal pay for women and men for the same work or work of equal value and to prevent women and men from being paid differently.
    • In summary, the law contains:
      • An employee's right to information
      • A reporting obligation on the status of equal pay for certain businesses (depending on the company’s size)
      • A call for employers to voluntarily establish company procedures for reviewing pay structures
    • In addition, the works council is involved in the fulfillment of this right to information and its rights in connection with the review of pay structures are emphasised.

  • Spain

    Spanish legislation protects against discriminatory situations through laws on equal treatment as well as equal remuneration between women and men. It also establishes minimum rights for disabled employees, as well as certain sanctions for certain infringements of equal employment rights.

    Equal treatment laws

    The right to equal treatment and non-discrimination between women and men in employment, working relations and working conditions is widely recognised in the Spanish legal system.

    • The Spanish Constitution recognises the principle of equality in Articles 9.2 and 14. It recognises that Spaniards are equal before the law, without any discrimination whatsoever.
    • Article 4 of the Workers' Statute recognises that employees have the right not to be discriminated against directly or indirectly for employment, or once employed, on the grounds of sex, marital status, age, racial or ethnic origin, social status, religion or belief, political ideas, sexual orientation, membership or not membership of a trade union, as well as on the grounds of language, within the Spanish state.
    • Likewise, unilateral decisions by the business may constitute very serious infringements as set out in article 8. 12 of the Law on Offences and Penalties in the Social Order, if they involve direct or indirect unfavourable discrimination on the grounds of age or disability or favourable or adverse discrimination in terms of remuneration, working hours, training, promotion and other working conditions, on the grounds of sex, origin, including racial or ethnic origin, marital status, social status, religion or beliefs, political ideas, sexual orientation.
    • In addition, employer decisions that result in unfavourable treatment of employees as a reaction to a complaint made within the company or to an administrative or judicial action aimed at enforcing compliance with the principle of equal treatment and non-discrimination will be sanctioned.
    • Spanish legislation also recognises that employees with temporary and fixed-term contracts have the same rights as employees with contracts of indefinite duration, apart from the specific particularities of each of the contractual modalities as regards the termination of the contract and those expressly provided for by law in relation to training contracts.
    • Law 15/2022 on equal treatment and non-discrimination transposes the EU directives into Spanish law. It covers existing and future discrimination, as the challenges of equality change with society and, consequently, so too will the responses required in the future. The aim is to guarantee compliance with the rules governing equality and non-discrimination.

    Gender pay gap

    The Spanish Royal Decree 902/2020 regulates equal salaries for men and women.

    On the one hand, it recognises the principle of pay transparency, which makes it possible to obtain sufficient and significant information on the value and amount of remuneration, making it possible to deduce and identify possible direct and indirect discrimination, through instruments such as a pay register - which must include the average values of salaries, salary supplements and non-wage payments of the workforce broken down by sex, pay audits and job evaluation in collective bargaining agreements.

    On the other hand, the principle of equal pay for work of equal value is recognised. This will be fulfilled when the nature of the functions or tasks effectively entrusted, the educational, professional or training conditions required for their exercise, the factors strictly related to their performance and the working conditions in which such activities are actually carried out are equivalent.

    Quotas

    • Currently, there is no general quota for employers to hire a certain number of women in Spain.
    • The presence of women on the boards of directors of Spanish listed companies has grown exponentially in recent years.
    • However, the Comisión Nacional del Mercado de Valores (CNMV) set a target for Spanish boards of directors to be made up of at least 40% women. Initially, it set this challenge for 2020, and then, aware of the complexity of achieving this goal by that date, it postponed the deadline for meeting it to two years later: by 2022 all listed companies are required by law to meet this diversity quota.

    Rights of disabled employees

    • The General Law on the Rights of Persons With Disabilities and their Social Inclusion determines that people with handicap will be protected by the public administrations. In addition to the rights that any employee has, they will also have the right to equality and a access training to help them adapt to the job role. This is because they may be more susceptible to suffer some kind of exclusion.
    • The Workers' Statute determines as a fundamental right the right to physical integrity and a correct health and safety policy.
    • On the other hand, article 15.d) of Law 31/1995 on the Prevention of Risks at Work stipulates that the company must adapt the job to the employee. In this sense, the employer must adapt the workplace of the disabled person according to his or her personal circumstances.In addition, public and private companies employing 50 or more employees are obliged to ensure that at least 2% of them are disabled workers, unless there is a collective agreement or the employer wishes to be exempted from the obligation, provided that alternative measures are applied.

  • France

    French labour law supports diversity at the workplace thanks to various regulations, such as prohibition of discrimination, protection of unionised employees and equality between men and women.

    Currently, two issues are the subject of important litigation: discrimination based on religion, such as employees wearing religious signs in the workplace, and equal treatment between on-site and remote working employees.

    Equal treatment laws

    Equal treatment is a fundamental principle of French labour law. It applies mainly to remuneration, where two employees placed in an identical situation cannot be treated differently.

    Recently, the French Supreme Court ruled that the mere difference in degrees does not justify a difference in treatment between employees performing the same duties, unless the employer can justify that the possession of a specific degree attests to particular knowledge useful to the performance of the position held. The reality and relevance of the justification is up to the judge to review.

    Another issue relates to equal treatment between on-site and remote working employees. Under the Labour Code, these employees should have the same rights. However, many employers refuse to give luncheon vouchers to remote working employees or to reimburse their commute to and from work when they need to be present at the office.

    Anti-discrimination

    Labour law prohibits any discrimination, whether at the time of recruitment, execution or termination of the employment contract.

    Businesses should be aware that the French government has recently decided to re-launch a testing procedure. This involves sending similar fictitious applications to companies, differentiated only by the name of the person, with or without a North-African sound, in order to study the recruiters' behavior and identify possible discrimination.

    The government is also working on prohibiting discrimination based on physical features.  

    Quotas

    The French Labour Code sets only one quota, which concerns disabled people. All employers, including those with fewer than 20 employees, have to declare the disabled workers they employ, which will make it possible to better identify their needs and meet them more effectively.

    However, only employers with 20 or more employees are subject to the obligation to employ 6% of disabled workers and have to pay a contribution if they fail to meet this target.

    Caregiver leave

    Leave for related caregivers allows employees to take care of a disabled or elderly people or a people who are losing their independence. This leave is available for a limited time if the person being cared for is lives in France and is a family member or if there are close ties with the person being cared for.

    A decree of July 22, 2022 issued pursuant to Article 54 of the Social Security Financing Act for 2022 expended the scope of beneficiaries of family caregiver leave. Therefore, it is no longer necessary for the disability or loss of autonomy of the person being cared for to be "particularly serious" in order to benefit from caregiver leave.

    Gender pay gap

    The law of September 5, 2018, introduced an obligation for companies with at least 50 employees to publish an index relating to wage gaps between women and men.

    However, faced with the observation that only 2% of companies publishing their index (61% of companies subject to the publication obligation) ensure perfect equality between men and women, as of this year, the obligations to publish the gender equality index have been extended.

    Therefore, article 13 of Law no. 2021-1774 of December 24, 2021, aiming at accelerating economic and professional equality, introduces the obligations relating to the Professional Equality Index through the following measures:

    • The publication, , of the results obtained for all the indicators of the Index on by the Labor Ministry’s website.
    • For companies with an overall score of less than 75 points, the obligation to publish, through external communication and within the company, the corrective measures defined in accordance with Article L. 1142-9 of the Labor Code.
    • For companies with an overall score of less than 85 points, the obligation to set and publish improvement targets for each of the Index's indicators.

  • United Kingdom

    Since many organisations in the UK have transitioned to a hybrid model of working that involves working from home at least part of the week, there has been an increased level of satisfaction amongst certain sections of the workforce, for example disabled workers or women with caring responsibilities. This is because the added flexibility that hybrid working has afforded them has given them better balance in their working lives or, in some cases, enabled them to enter the job market with fewer concerns about how they will cope.

    Public Sector Equality Duty

    • All public authorities, when exercising any of their functions, are subject to the Public Sector Equality Duty (PSED). The PSED is set out in section 149 of the Equality Act 2010.
    • The PSED requires public authorities to have due regard to the need to:
      • eliminate discrimination, harassment, victimisation and any other conduct that is prohibited by or under the Equality Act;
      • advance equality of opportunity between persons who share a ‘relevant protected characteristic’ and persons who do not share it; and
      • foster good relations between persons who share a ‘relevant protected characteristic’ and persons who do not share it.
    • Having due regard to advancing equality of opportunity involves:
      • Removing or minimising disadvantages suffered by people due to their protected characteristics;
      • Taking steps to meet the needs of people from protected groups where these are different from the needs of other people; and
      • Encouraging people from protected groups to participate in public life or in other activities where their participation is disproportionately low.

    Pretected characteristisc as set out in the Equality Act 2010 are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.

    Positive action

    • Positive action is where you assist an under-represented group or a disadvantaged group. These are groups that share one of the 9 ‘protected characteristics’.
    • Employers can legally carry out positive action on their employees or job applicants if:
      • they reasonably believe that the specific protected characteristic could put those individuals at a disadvantage;
      • in their business, they reasonably believe that those employes are underrepresented as a result of their protected characteristic; or
      • the relevant individuals otherwise have particular needs concerning their protected characteristics.
    • Types of positive action that an employer might take include:
      • boosting the number of female colleagues in senior positions by allowing them to attend training that prepares them for promotion;
      • allowing job applicants with a disability to attend an interview for a job provided that they meet the minimum criteria; and
      • favouring the job candidate from an under-represented group, where two candidates are ‘as qualified’ as each other.

    FCA reporting requirements & diversity reviews

    • UK companies with the financial services sector must disclose information regarding their diversity policy in their corporate governance statement.
    • The information disclosed by a company must include:
      • information on the policy’s objectives;
      • how many individuals from each protected characteristic are on the company’s board; and
      • what the pay discrepancies are between employees with protected characteristics and employees withhout protected characteristics.
    • The Hampton-Alexander Review was established to improve female representation at executive level in FTSE 350 companies and raise the target to 33% of women on boards by 2020. In recent years, FTSE 350 companies may have been voluntarily disclosing details of the percentage of women represented on their boards and executive committee in line with the recommendations of the review. The work of the Hampton-Alexander Review is continued by the FTSE Women Leaders Review, which reported in February 2022.

    Pay transparency

    • On 8 March 2022, the UK government announced that they will be launching a pay transparency scheme, set to last between six to 12 months. The voluntary scheme encourages organisations to sign up and display salaries in all of their job ads to help close the gender pay gap.
    • Last year, 19% of companies in the UK voluntarily reported on their ethnicity gap.
    • The Chartered Institute of Personnel and Development has issued voluntary guidance to UK companies wanting to report on their ethnicity pay gap. It is based on 6 main principles including:
      • Align ethnicity pay reporting with gender pay reporting, but recognise the differences.
      • Remember ethnicity representation is as important as, and strongly linked to, ethnicity pay gaps.
      • Combine comparability in data with tailoring of analysis and actions.

  • United Arab Emirates

    By the nature of its geographical location and the large expatriate workforce, a diverse workplace is - and has been for some time - common in the United Arab Emirates. 

    More than ever before employers in the Middle East are committed to a work environment that embraces diversity and inclusion. Employers are increasingly recognizing that a diverse workforce that creates a respectful environment enabling employees to reach their full potential is key to attracting, developing and retaining the best talent.

    What is plain is that attracting and retaining top talent demands a diverse and inclusive place of work.  This is particularly important in such a multicultural country as the UAE where individuals from all around the world come together to live and work.  Companies operating in the UAE would be well advised to ensure that internal policies and procedures are implemented, and that existing policies are updated, to ensure that all employees are aware of the conduct expected of them under the law and its supporting regulations.

    Government Initiatives and the workplace

    The country’s commitment to anti-discrimination and equality of treatment is enshrined into various of its laws. In addition to legislation, the UAE’s Government has introduced various initiatives to promote equality and diversity across the workplace including:

    • Gender Balance Council (GBC): Established in 2015 the UAE’s GBC aims are to reduce gender gaps across all sectors, enhance the UAE’s ranking in global gender equality, achieve balance in decision-making positions and promote the UAE’s status as a benchmark for gender balance legislation. Companies are proving their commitment to gender balance in various ways such as: setting targets for females to be represented on Boards; upskilling females returning to work from a career break; offering atypical working practices; and parental leave for both female and male employees.
    • National Tolerance: 2019 was declared as the “Year or Tolerance” showing the UAE’s pledge to being a global capital for tolerance with one of the founding pillars being “tolerance at the workplace” setting the baseline for employers across the UAE to provide an equal footing and access to work for all employees regardless of race, nationality, ethnicity, social background, sex.  
    • National Strategy for Empowering People with Disabilities and Dubai's Disability Strategy 2020: These strategies followed the 2018 Ministerial Decree which gives disabled employees a legal right to be treated in the same way as other employees.  The decree stresses the importance of suitable working conditions, requiring employers to grant exemptions and privileges to their disabled employees wherever necessary. 

    Anti-discrimination in UAE Labour Law

    The repeal and replacement of the 1980 UAE Labour Law in February 2022 marked, amongst others, a big shift in anti-discrimination laws in the workplace. 

    The UAE’s Labour Law prohibits discrimination that would impair equal opportunities for an employee or prejudice an employee from gaining employment and continuing such employment based on any of the following characteristics: race, colour, sex, religion, national origin, social origin and disability. 

    Whilst maternity and/or pregnancy are not listed as a protected characteristic, employers are prohibited from terminating an employee or threatening to terminate an employee due to the fact she is pregnant or on maternity leave

    Therefore, and signficantly, employees in the UAE have a free-standing right under the Labour Law to file a discriminaiton claim against their employer in the local courts where they feel they have suffered less favourable treatment, for example, by receiving smaller salary increments than their colleagues or missing out on a promotion opportunity, because of their protected characteristic. 

    Whilst there are no specific penalties attributed to discrimination and/or sexual harassment, an employer may be liable for fines ranging between AED 5,000 and AED 1,000,000 for breaches of the law with a possible multiplier effect for the number of employees affected by the breach.

    Businesses operating in the UAE should review their working practices, recruitment and exit practices to ensure that they are not tainted by discrimination, to promote equality across the board and mitigate the risk of discriminaiton claims in the local courts. How the courts will adjudicate and quantify successful claims remains to be seen but this is something that all employers will be watching carefully.

    Family leave

    Maternity leave and pay was increased under the new 2021 UAE Labur Law from 45 calendar days at full pay to 60 calendar days (the first 45 day at full pay and the remaining 15 days at half pay).  Significantly, maternity leave and pay is a day one right and there is no qualifying period of service for female employees to avail this statutory entitlement.

    Similar to other jurisdicions around the world, the UAE recognised that attracting and retaining top talent required family leave to be extended. But the law falls short of providing adequate paternity leave however, and in practice, the majority of employers enhance the minimum position of 5 days within 6 month after the child’s birth and provide extended paternity leave and pay. It is likely that this shift has been incentivised by the overall changes in the law and a competitve marketplace.

    Emiratization

    Positive discrimination in the form of Emiratization, meaning the employment of UAE Nationals into the private sector, has been a key initiative for the UAE Government for several years and by 2023 many businesses will need UAE Nationals to make up at least 2% of their workforce with this quota increasing by 2% year-on-year.

    To avoid fines for not reaching their quotas, employers in the region are adopting various initiatives such as graduate training programs to encourage UAE Nationals into the private workspace which presents a real race for talent. 

  • Singapore

    According to a recent survey by the Singapore National Employers Federation, there is currently a growing trend of recognition in Singapore of the importance of diversity and fair employment practices.

    In this regard, the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) was set up in 2006 by Singapore’s labour tripartite partners, the Ministry of Manpower (MOM), National Trades Union Congress and Singapore National Employers Federation. Their aim is to promote the adoption of fair, responsible and progressive employment practices.

    TAFEP currently has in place a few guidelines on employment practices, including the Tripartite Guidelines on Fair Employment Practices (Guidelines) and the Fair Consideration Framework.

    Although Article 12 of the Singapore Constitution broadly prohibits discrimination against Singapore citizens and states that all persons are entitled to the equal protection of the law, generally there is currently no standalone legislative framework which directly regulates discrimination in the employment context. This is instead addressed by the Guidelines and the FCF, which together aim to promote fair and merit-based employment practices in Singapore.

    There are certain special categories of individuals however who receive additional protection under existing legislation:

    • Female employees who are on maternity leave receive maternity protection;
    • Employees who are 63 years and below cannot be dismissed on the basis of their age; and
    • Employees who are between 63 years old and 68 years old and who fulfil the statutory criteria for re-employment must be offered re-employment.

    According to the Guidelines, employers must develop merit-based workplaces by adhering to the Guidelines and implementing good employment practices. There are currently plans for these Guidelines to be implemented into legislation, although the details of such plans are still under wraps at this time.>

  • The Netherlands

    Dutch law promotes equality and contains several protections against unlawful discrimination.

    Further protections are envisaged. Currently a legislative proposal is pending to promote equal opportunities in recruitment and selection. If adopted, the bill would, among other matters, introduce an obligation for employers to adopt a working method aimed at preventing labor market discrimination in recruitment and selection. 

    Equal treatment laws

    The principle of equal treatment is enshrined in several places in Dutch legislation.

    • Article 1 of the Constitution (Grondwet) provides that all persons in the Netherlands are treated equal in equal cases and that discrimination on grounds of religion, belief, political affiliation, race, sex or on any ground whatsoever is not permitted.
    • Certain specific equal treatment obligations and unlawful discrimination prohibitions are set down in equal treatment legislation. Protected categories include religion, belief, political affiliation, race, gender - including gender characteristics, gender identity and gender expression -, nationality, sexual orientation, marital status, age, disability and chronic illness.
    • The Dutch Civil Code (Burgerlijk Wetboek) provides specific rules on the equal treatment of men and women in the context of employment, of parttime and fulltime employees and of employees with a fixed term or an indefinite term employment contract.
    • Legal consequences of violations may include claims for compensation or annulment of the termination of the employment contract.

    Rights of disabled or chronically ill employees

    • Specific protections apply to persons with a disability or chronic illness (Wet gelijke behandeling op grond van handicap of chronische ziekte).
    • Inter alia, the employer must make effective adjustments as required, unless they impose a disproportionate burden on them. Effective adjustments are those that are suitable and necessary to allow the disabled or chronically ill person to participate in social life like everyone else. This is in any case understood to mean the admission of assistance dogs.
    • At this time there are no individual quota for employers in the private sector in this context.

    Quotas

    • As from 1 January 2022 a quota aimed at improving gender balance applies to the supervisory board of Dutch public and private limited companies (N.V.s and B.V.s) whose shares or depositary receipts are listed on a regulated Dutch market.
    • Additionally, large public and private limited companies must set appropriate and ambitious goals in the form of a target to make the ratio between the number of men and women on the board, the supervisory board and categories of employees in managerial positions to be determined by the company more balanced. The companies are also obliged to draw up a plan to achieve these goals.
    • Companies are subject to certain reporting obligations.

    Renumeration transparency

    • Dutch law currently does not contain specific rules on pay transparency.
    • For certain companies with at least 100 employees, the Dutch Works Councils Act (Wet op de ondernemingsraden) provides that the works council is - at least annually - entitled to written information on the amount and content of the employment conditions and agreements per different group of persons employed in the company. There are starting points for the view that, depending on the circumstances, a group division on the basis of gender, age or type of employment contract may be required.

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