11/24/23, 6:22 PM Workplace equality in India - Commentary - Lexology

March 8 2023
AT U L G U P TA , K A N I S H K A

Workplace equality in India M A G G O N , TA N I A G U P TA

Trilegal | Employment & Immigration - India

 Introduction

 Gender equality through a legal lens

 What can still be done?

 Comment

Introduction

The World Bank's report on Women, Business and the Law 2021 notes
that, on average, women benefit from three-quarters of the rights that
men have.

Various factors contribute to gender inequality, including social

background, mindsets and lack of awareness. In India, as a largely
patriarchal society, gender inequality is often evident from childhood.
Freedom of movement, education and choice of marriage is often more
limited for girls. These inequalities also translate into adulthood, and
women's social and professional life.

While gender inequality needs to be addressed both inside and outside

the workplace, this article focuses on this subject in a workplace
context.

Gender equality through legal lens

Under the Constitution of India, "equality" is a fundamental right

guaranteed to all citizens. The state is prohibited from discriminating
against anyone on the basis of race, caste or sex and has the obligation
to provide equal opportunities to all citizens. The constitution also
allows the government to take special measures for the benefit of
women. However, the provisions under the constitution can only be

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enforced against the state and do not apply to private companies,

requiring the enactment of special laws that apply to the wider
population.

Efforts have also been made to ensure representation of women and

transgender people in law-making bodies as well as in the policy wings
of the government. Over the years, as a nation, India has made
significant progress to improve the participation and retention of women
in the workforce by enacting several progressive laws that also apply to
private sector employment.

The Equal Remuneration (ER) Act 1976 is the primary legislation on this
subject. It is mandatory for employers to ensure equal salaries are paid
to men and women doing the same work or work of a similar nature.
The ER Act prohibits discrimination against women in matters of
recruitment, training, transfers and promotions.

The ER Act presently only protects women and does not expressly
prohibit positive discrimination in favour of women over male employees
(or employees of other genders), which has been used by some
progressive employers to give preference to female candidates. The
proposed Code on Wages 2019 (the Wage Code), as and when it is
implemented, will subsume the ER Act and expand it further, by doing
away with the binary notion of men and women and making the existing
provisions gender neutral.

India has long had the Maternity Benefit (MB) Act 1961, which
guaranteed women with a 12-week employer-sponsored paid maternity
benefit. The MB Act was amended in 2017 to make it one of the most
generous in the world, with female employees now entitled to 26 weeks
of paid maternity leave for the first two children, access to childcare,
adoption and surrogacy leave. The MB Act also expressly prohibits an
employer from dismissing female employees during their maternity
leave. It is also unlawful for an employer to vary the conditions of
service of female employees to their detriment while they are on
maternity leave.

More recently, the Sexual Harassment of Women at Workplace

(Prevention, Prohibition and Redressal) Act 2013 (the POSH Act) also
introduced a requirement for employers to provide women with a
workplace that is free from sexual harassment. Obligations include:

establishing a policy;

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setting up an internal committee to investigate grievances;

carrying out regular trainings; and

publicly reporting of statistics on the number of sexual

harassment grievances raised and handled every year.

The judiciary has also made important observations on different aspects

of maternity leave and childcare. In a recent judgment, the Supreme
Court sought to protect women's participation in the workplace by
emphasising the need for balance between the right to maternity benefit
and the right to work. The Court stressed the fact that social legislations
in the country must be purposively interpreted and should not stick to
literal bounds to be able to bridge the gap between law and society.
Further, as a stepping stone towards the recognition of "atypical" family
structures in India, the Court observed that familial structures may
change (eg, take the form of unmarried partnerships or queer
relationships) and courts in such situations will need to give effect to the
purpose of law in question rather than to prevent its application.

This judgment suggested (this was not a binding part of the order) that
employers would need to keep in mind redefined familial roles while
extending employee benefits, such as a woman requiring maternity
leave to care for her partner's children, an unmarried couple or a single
household wanting to adopt a child, or an LGBTQIA+ person wanting to
start a family of their own. The court suggested that employers would
also need to embed these redefined inclusions of family structures in
their corporate social responsibility strategy to help deliver equal
opportunities and create a non-discriminatory work environment.

Laws such as the Factories Act and state specific Shops and
Commercial Establishments Acts have long required employers to
follow special security and other measures to hire women employees
during night-time hours, with a view to encourage women participation
in the workplace.

India has also enacted special laws that prohibit discrimination against
persons with disabilities and transgender people in any matter relating
to employment, and employers are expected to establish a robust
complaint redressal mechanism for dealing with complaints in this
respect.

What can still be done?

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India still has a long road ahead to achieve true gender parity and
workplace inclusivity.

Labour force surveys conducted in 2020-21 show that the estimated

worker population ratio for men and women was 73.5% and 31.4%,
respectively. World Bank data pegs the national estimate for female
labour workforce participation at around 19%.

While the legal framework discussed above is meant to increase

participation of other genders in the workforce, effective implementation
of many of these laws is yet to occur. For instance, though the ER Act
mandates equal pay for equal work and aims to create anti-
discriminatory employment standards, the penalties for non-compliance
are low and so is the rate of enforcement.

Research shows that in the last decade, there have been roughly 16
reported rulings under the ER Act (mostly around procedural non-
compliances) and none of them seem to directly deal with substantive
issues such as discriminatory hiring practices against women or pay
inequities. Unlike a few other countries, employers in India do not have
to undertake pay-equity audits and publish their results, which can be a
significant self-correcting mechanism.

Similarly, while the provisions under the MB Act are well intended,
coupled with poor enforcement of the ER Act, discrimination against
women at the time of hiring often goes unchecked – especially in
entities that may not be professionally managed. The apprehension of
having to extend six months of fully paid maternity benefit without any
financial support(1) from the government can often prove to be a gating
issue at the time of employment – especially for smaller businesses
who avoid hiring female employees altogether.

Recently, the Supreme Court dismissed a public interest lawsuit that

sought directions to be issued to all state governments, requiring them
to extend special "period leave" to women. The judges agreed with
submissions made to the effect that a directive of this sort may
dissuade prospective employers from hiring women for jobs, making
this a matter of significant debate in recent weeks. There are other
areas today where employers are required to undertake additional –
and potentially onerous - compliance burdens to hire women – for
example, seeking government permission to employ women in night
shifts and taking up complete responsibility for their safe transport to
and from work. Shifting the legal and financial burden of what is

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essentially a state function (ie, to ensure safety and security of all

citizens) to a private employer, could result in employers being
dissuaded from hiring female employees.

In relation to overall inclusivity, while companies in India have moved to

implement equal opportunity policies, enforcement mechanisms under
laws as such the Persons with Disabilities Act or the Transgender
Persons Protection (TG) Act are vague. There is significant ambiguity
on how individual grievances can be handled and whether the
authorities actually have the power to pass binding strictures. Further,
most states have not yet appointed relevant authorities to implement
these laws, leading to overall poor implementation and awareness. In
particular, the TG Act seems to suffer from loopholes where even
powers of enforcement against private companies are questionable.

Comment

While India fares reasonably well on women's right on a global scale,

there is still scope for improvement. The government should actively
consider introducing parental leave in India, so that men get the chance
to play an equal role in child-care and women alone are not viewed as
potential financial liabilities by employers anymore. To ease the cost
burden on employers, the benefits can be capped in monetary value, be
partly state sponsored and/or structured such that employers enjoy
other financial incentives such as incremental tax cuts on parental
benefits.

There is need for more well-defined anti-discrimination laws, which

make it illegal to enquire about matters such as marital status and
maternity plans at the time of hiring. Laws should be introduced to
prohibit inquiring about the salary earned in previous employment. Such
a practice is rampant in India, and this information is often used to
benchmark offers, rather than principles of pay-equity within the
organisation. Such a law would go a long way in ensuring better pay
parity for all genders. Awareness and enforcement of such laws would
also need to be drastically improved.

Increased acceptance of remote working has also opened up newer

opportunities for greater female and other gender participation in the
workforce. Increased adoption of flexible working norms by employers
(supported by enabling legislation that is presently missing) is likely to

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further improve female participation in the workforce, who may find it

easier to achieve a balance between their professional and personal
responsibilities.

Such changes along with better awareness and reforms in other areas
such as property and inheritance rights in favour of women and other
genders, will be crucial to achieve better gender equality in India.

For further information on this topic please contact Atul Gupta,

Kanishka Maggon or Tania Gupta at Trilegal by telephone (+91 80 4343
4646) or email (atul.gupta@trilegal.com,
kanishka.maggon@trilegal.com or tania.gupta@trilegal.com). The
Trilegal website can be accessed at www.trilegal.com.

Endnotes

(1) Only women earning below 21,000 rupees per month (less than
$255) are covered by the Employees State Insurance Act, which
provides a state insured maternity benefit. The contributions for this are
partly sponsored by the employer and partly sponsored by the
employee. Any well-paid female employee must consequently receive
her maternity benefit entirely at the employer's cost.

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