Diversity and Inclusion in the Workplace

According to research by McKinsey, companies with low rates of gender and racial diversity are 29% more likely to be less profitable than their more inclusive competitors. Similarly, companies with higher gender diversity on executive teams have a 21% likelihood of outperforming companies that scored low on gender diversity. The business case for having an inclusive culture is clear. Greater diversity among executive teams perform better. Businesses with stronger commitments to diversity are also more likely to attract top talent and improve customer and employee satisfaction.

However, there is a disconnect between this data and the reality on the ground. For example, according to a recent survey of more than 800 global HR professionals commissioned by Josh Bersin, 40% of global organisations have no comprehensive diversity and inclusion strategy. 76% of global companies have no diversity or inclusion goals of any kind. 75% of global companies do not include diversity and inclusion in their leadership development. Only 32% of global companies mandate diversity and inclusion training for employees and only a third offer such training to managers. And only 22% of global respondents believe their company’s diversity and inclusion efforts have raised awareness among employees or customers.

In this article we consider whether there is a legal requirement in Hong Kong for employers to cultivate an inclusive workplace and, if so, to what extent.

Equal opportunities policies and training

In Hong Kong, workplace discrimination and harassment is prohibited under the four anti-discrimination ordinances on the grounds of sex (including pregnancy and marital status), race (including colour, descent and national or ethnic origin), disability and family status. With effect from June 2021, breastfeeding will also be a protected characteristic as a result of the Discrimination Legislation (Miscellaneous Amendments) Ordinance 2020 which was passed last year.

Strictly speaking, there is no express requirement in any of the anti-discrimination ordinances for employers to implement diversity and inclusion measures in the workplace. However, each of the anti-discrimination ordinances is supported by an underlying Code of Practice – a set of guidance issued by the Equal Opportunities Commission on the practical steps employers should take to comply with their legal duties. Each Code of Practice recommends that employers implement a clear and comprehensive equal opportunities policy that contains certain key details (e.g. that employees know where to make complaints of discrimination or harassment), and that they conduct equal opportunities training on their respective grounds. While the Codes of Practice are technically non-binding as a matter of law, the Equal Opportunities Commission or a court will consider the extent to which an employer has complied with them for the purposes of determining liability. Accordingly, it is highly recommended that employers follow the principles set out in the Codes of Practice to the extent possible.

There is no “one size fits all” approach in terms of what should go into an equal opportunities policy or workplace equal opportunities training.  While a small company with a simple structure might provide general training about the anti-discrimination ordinances and the company’s equal opportunities policy, a large company with a more complex organisation structure should consider providing bespoke training for their employees that is tailored to their relevant areas or levels of responsibilities. For example, general employees might be given a basic training on their rights and responsibilities under the law and the employer’s equal opportunities policy, whereas HR employees should be trained to ensure proper compliance with respect to issues such as recruitment and selection, promotion and dismissals. Employees who are responsible for handling discrimination or harassment complaints should be given appropriate training as to how to carry out investigations and resolve disputes. Those in management should be trained to understand their particular obligations in disseminating anti-discrimination information and monitoring the conduct of their employees.

Vicarious liability

In addition, employers are responsible for the wrongful acts committed by their employees when acting in the course of their employment duties. This is known as “vicarious liability” and extends to actions performed by employees that amount to discrimination or harassment, meaning that a victim of discrimination or harassment in the workplace can sue both the individual perpetrator and the employer jointly (indeed, this is a common tactic).

In order to have a viable defence in the event of any dispute, an employer must be able to show that it took all “reasonably practicable steps” to prevent the discrimination or harassment from taking place to begin with. What is considered to be reasonably practicable will vary on a case-by-case-basis. Generally speaking, however, the employer should be able to demonstrate that:

• it has implemented a clear and robust equal opportunities policy which complies with the guidelines contained in the applicable Code of Practice;
• the policy is regularly updated and employees know where to access it;
• training is delivered on the policy which is relevant to the organisation’s workplace and is kept up-to-date; and
• employees know how to raise any concerns of discrimination or harassment on a confidential basis.

If the employer is unable to demonstrate they have taken the above steps in a meaningful manner, then there is a risk they may be held liable for the discrimination or harassment committed by the employee.

Taking positive measures

Some employers are going above and beyond the minimum requirements and are considering what more can be done to align their business outcomes with diversity goals. Some of the initiatives include:

• collaborating with customers and business partners on activities such as events, establishing networking groups and developing research publications;
• proactively showcasing diverse talent within the business;
• setting goals or targets as to levels of participation or representation of minority groups at various levels within the company (e.g. 30% of senior leaders to be female by 2025), together with implementing initiatives around recruitment and promotion to try to support achievement of these aims; and
• policies to the effect that at least one member of a minority group must be considered in the final interview round of any recruitment process

When implementing any initiatives, it is important for employers to also bear in mind that favourable treatment on the basis of a protected characteristic could amount to discrimination. For example, if a male candidate is denied the opportunity to interview by reason that a female candidate is preferred this could amount to direct discrimination. Or if a hiring policy applies equally to all candidates but has a disproportionate and detrimental impact on someone who is not a protected minority in that they are less likely to be successful when applying for a given role, then this could amount to indirect discrimination.

However, there is a general exception under all of the anti-discrimination ordinances in Hong Kong in relation to “special measures”. Under this exception, a discriminatory act that would otherwise be unlawful will be lawful if it affords persons with a protected characteristic:

• equal opportunities with other staff;
• goods or services, facilities or opportunities to meet their special needs in relation to employment; or
• grants, benefits or programmes, whether direct or indirect, to meet their special needs in relation to employment.

In addition, measures that are intended to address socio-economic and cultural differences should be temporary in nature rather than permanent – and should only continue until such time as the desired results have been achieved.

Conclusion

Diversity and inclusion is part of the cultural mainstream in a way that many never thought would have been possible a decade ago. However, there remains a significant amount of work left to do in order to translate this heightened awareness into real outcomes and to be able to change attitudes on the ground, particularly in Asia and Hong Kong.

While there is no statutory requirement to cultivate an inclusive workplace under the anti-discrimination ordinances, employers are highly encouraged to comply with the guidance contained in the various Codes of Practice and failure to do so can lead to liability in the event of a dispute. It is also important that employers are able to demonstrate if challenged that they have taken all reasonably practicable steps to prevent any discrimination or harassment from taking place within their organisations.

To the extent employers are considering taking measures to actively promote minority groups at the expense of majority groups, then they should ensure that any steps taken are compliant with the special measures protections under the anti-discrimination ordinances.

DLA Piper

DLA Piper is a global law firm with lawyers located in more than 40 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific, positioning them to help clients with their legal needs around the world.