This page presents an introduction to and analysis of the dilemma. It does so through the integration of real-world scenarios and case studies, examination of emerging economy contexts and exploration of the specific business risks posed by the dilemma. It also suggests a range of actions that responsible companies can take in order to manage and mitigate those risks.
"What should a company do when its internal policies prohibit gender discrimination and promote gender equality, yet local cultural, legal or business norms permit and promote discrimination against women within some of the countries where it operates?"
The dilemma for business is how to address discrimination in a responsible manner when it has operations in countries where women face legal and/or cultural discrimination, and enjoy little or no protection. A point of departure might be ensuring respect international standards in relation to discrimination and embedding them in corporate policy. However, following international human rights law pertaining to gender equality in countries where there is entrenched discrimination could result in serious legal implications.
One example would be a company operating in a country that prohibits women from working in certain sectors. If the company does hire woman in these sectors it could be prosecuted for breaching national law. If it does not, it would be breaching its own policies as well as human rights principles which uphold the elimination of all forms of discrimination against women. When faced with this dilemma, a company could simply choose to not operate in such countries. However, often this is not commercially viable and will not assist women living in the country who could be employed in alternative positions, thereby allowing them the right to earn a living.
Whilst this is an extreme example of the dilemma, in many countries a company will have to address gender discrimination that is far more hidden. In many emerging markets and developing countries, gender-based discrimination is embedded in culture and not necessarily opposed by the majority of women. This includes: workplace harassment; the threat of losing their jobs if they become pregnant; inflexible working hours for working mothers; and having to deal with entrenched stereotypes which prevent career progression. A company that wishes to address these challenges responsibly should consider resolving these issues and breaking down the gender barriers that have given rise to discrimination in the first place.
MAS Holdings, a manufacturer of intimate apparel, is headquartered in Sri Lanka (with operations in India). It has a turnover of over US$700 million and its clients include Victoria’s Secret, Nike, Speedo, Gap, Marks & Spencer and Triumph International. At the company’s base in Sri Lanka, 75% of workers are women. In the factories, 80% are women.
The women in Sri Lanka are subject to discrimination, both in the home and at work. The law provides for equal employment opportunity in the public sector, but women have no legal protection against discrimination in the private sector.1 Women constitute half of the formal workforce, although they are paid lower salaries and have difficulty rising to supervisory positions. Multi-national companies (MNCs) often source products from developing countries or emerging markets where gender discrimination is both legislated and culturally tolerated.
The dilemma for these companies is how they can ensure that company policy promoting the protection of gender equality and prohibiting gender discrimination can be applied in their offices and facilities in these countries.
Walmart, the world’s largest retailer, has been accused of discrimination by approximately two million US female employees in a legal class action.2 This action was filed in 2001 and claims that female workers received less pay than their male counterparts and were offered fewer promotions. The Plaintiff’s further claim that senior management endorsed gender discrimination and it was prevalent in the company’s corporate culture. The Plaintiffs’ cite testimony, for example, of women in management required to attend office meetings held at strip clubs or Hooters Sports Bars and women in senior positions being called ‘little Janie Qs’ and ‘girls’3
The Walmart litigation is an example of the dilemma being challenged in countries where gender equality has been protected by law, often for a number of years. How does a company ensure that employees comply with policies that promote gender equality, especially in countries where gender discrimination is not properly safeguarded? The consequences of failing to protect female employees from gender discrimination can result in companies facing anti-discrimination law suits that can amount to large legal costs, a damaged reputation and, in worse case scenarios a loss in sales or shareholder value.
Since the 1980s Air India has been faced with legal action, governmental reviews and negative media in relation to its treatment of air hostesses.
Allegations include:
This is not uncommon treatment for many women in India who are faced with cultural and legal discrimination. The dilemma for a company operating in the country, is how to encourage an appropriate change in attitude as well as policy so that women are provided with the same opportunities.
According to The Labour Principles: A Guide for Business5 the ILO explains that workplace discrimination can occur with respect to: access to employment, promotion, training and vocational guidance, recruitment, hours of work and rest and paid holidays. Discrimination prevents women from attaining the right to equality and denies realisation of other fundamental rights, including the right to security of the person and the protection of the family.
Strategic and operational requirements oblige companies to work in countries where discrimination against women can be entrenched in law, culture and practice.
Companies are likely to experience this dilemma when they operate and source from countries where:
There are two types of discrimination that arise within the workplace, direct and indirect:
Direct discrimination (disparate treatment) occurs when female employees are treated less favourably than their male counterparts, solely on the grounds of gender. This can include, for example, female employees receiving a lower wage than their male peers, despite having the same experience. It can also include being asked discriminatory questions at a job interview, and an employer not hiring, promoting or wrongfully terminating an employee on the basis of gender. An example of wrongful termination could be dismissing a female worker after the employer finds out she is pregnant.
Indirect discrimination (disparate impact) occurs when a company’s policies and practices make it difficult for women to fulfil job requirements, or make it very cumbersome for women to continue working. Examples of disparate impact can include inflexible working conditions making it difficult for a mother to work full-time or part-time, or having to satisfy strength requirements for a job which are especially onerous for a woman to achieve. The absence of maternity leave provisions may also be considered to be disparate treatment.
Pay inequality: In many industries women are paid less than their male counterparts for similar work. Overall in 2008, in the majority of countries, women’s wages represented between 70% and 90% of men’s wages for the same job. Statistics show that across all sectors (excluding nurses, bus drivers, housemaids and typists) women earn 10% to 15% less than their male counterparts.8
This gap may be due to women taking time out of their career to look after children, resulting in reduced access to higher paying jobs as their career progress is put on hold. This can also result in gender discrimination in wages allotted to lower entry-level roles, possibly due to uneven rates of access to education. Women being less aggressive negotiators is also a contributing factor.
Workplace harassment: Many women experience sexual abuse and harassment in the workplace by colleagues and employers. A 2006 UN report entitled “Ending violence against women” estimated that between 40% and 50% of women in the European Union report some form of sexual harassment in the workplace. In addition, 60% of female garment workers in Bangladesh interviewed for a 2008 War on Want report entitled “Ignoring the Law”9 alleged that they had been subjected to obscene and sexually suggestive language in the workplace, while others reported instances of sexual abuse.
Reproductive status: Women are also discriminated against for their reproductive status, especially in emerging markets. In countries such as the US or the UK this discrimination might result in a woman receiving less pay and having less opportunity to move to senior positions due to the fact they require some time off to have a child. In some emerging markets violations of reproductive rights can also include mandatory pregnancy testing or sterilisation by employers and the distribution of contraceptives disguised as medications to combat tetanus or malaria.10
Employers also need to consider the impacts of exposure to chemicals on the reproductive health of both women and men, ensuring that they are adequately protected. Safeguards against exposure to hazardous materials are particularly relevant in the textile and horticulture sectors, or in occupations requiring the handling of chemically treated products and materials.
Women who are also members of a minority group: Finally, discrimination can be compounded for women with disabilities, women migrant workers and female members of minority groups. Other vulnerable groups include women domestic workers and those working in export processing zones, the majority of whom are women.
In addition, according to the Ethical Trading Initiative as many as 300 million people in developing countries alone are home workers, the majority of whom are women.11 Homeworkers may have restricted access to trade union representation and other worker-support networks. Health and safety conditions of such work may be hazardous and are often not subject to audit due to the hidden nature of the work.
Examples of the kinds of scenarios companies might face when operating in emerging economies include:
Bangladesh: Women generally earn less than men, but wages are more equitable in the garment and textile industry. Approximately 80% of workers in this industry are women.
A 2008 report entitled “Ignoring the Law”12 by NGO War on Want alleged that verbal abuse, teasing and corporeal punishment is the norm in many garment factories, particularly towards female employees. Over 60% of women interviewed in the report alleged that they had been subjected to obscene and sexually suggestive language in the workplace, while others reported instances of sexual abuse. Due to the stigma surrounding such situations, many incidents go unreported.
China: Although the law advocates equal rights for women, there are reports of workplace discrimination, sexual harassment, unfair dismissal, demotion and wage discrepancies between genders. The US Department of State reports that Chinese employers tend to prefer hiring men to avoid costs associated with maternity leave and childcare.13
Furthermore, the All-China Women’s Federation (ACWF) reports that 21% of rural women in cities were fired after becoming pregnant or giving birth. Female migrant workers are even more vulnerable. According to the ACWF more than 50% of female migrant workers do not have a contract, compared with 40% of male migrants.
India: Gender-based discrimination and violence towards women is deeply entrenched within Indian society. The US Department of State reports that women are frequently paid less than men for the same job, are not promoted as rapidly as men and are discriminated against in employment and credit applications.
The National Alliance of Women’s Organisation (NAWO) in its 2006 Second NGO Shadow report on CEDAW noted that the majority of employed women (87%) in India worked as agricultural labourers and cultivators. According to the report, in urban areas approximately 80% of women worked informally, mostly in the following areas: small trading, making incense, services, construction, domestic work, beedi rolling (rolling of tobacco), teaching, nursing and household employment. Only 17% of women in 2006 were employed in the formal sector and had recourse to national labour legislation and safeguards in the workplace.
Indonesia: According to the 2007 ITUC Report for the WTO General Council Review of Trade Policies of Indonesia women face discrimination in the workplace, in both hiring and gaining fair compensation. The report cites 2003 government labour statistics revealing that women earn on average 74% less than men. Furthermore, women are over-represented in unpaid and lower-paid positions in the informal sector and hold just 17% of managerial positions.
In the manufacturing sector, some activists have noted that employers relegate women to lower paying, lower-level jobs. An example of this discrimination is evident in factories: many female workers are hired as day labourers instead of as full-time permanent employees so that employers can evade their responsibility to provide benefits such as maternity leave.
Iran: The US Department of State’s 2009 Human Rights Report says that although 65% of university students are women, the use of quotas to limit the admission of women in certain disciplines, such as engineering and medicine, is common.
Even though women are represented in many fields of work – including the police force, municipal councils and legislature – they are prohibited from being appointed to more senior positions, including certain types of judges.
Mexico: Although there are laws protecting women in the workplace including equal pay for equal work and protection for pregnant women, these laws are not actively enforced. The US Department of State said in its 2009 Human Rights Report that the average salary for women in 2009 was 6.2% less than men; in some cases it was 40.3% less.
Furthermore, some employers are reportedly avoiding their responsibilities to protect women's privacy by requiring pregnancy tests in pre-employment physical examinations. Reports of sexual harassment in the workplace are also widespread. However, since cases are hard to prove victims do not report these incidents.
Nigeria: Official laws, policies and cultural practices permit discrimination against women. The Labour Act14 prohibits women from working at night in certain sectors of employment (including in industry and agriculture). The Nigerian NGO Coalition, a national network of over 50 registered Nigerian NGOs, in its 2008 report to CEDAW noted that this promotes the stereotyping of labour roles.15 Women face considerable economic discrimination. The Nigerian NGO Coalition report highlighted discrimination against women in the private sector, particularly in access to employment, promotion to higher professional positions and pay.
Given that women work predominantly in the informal sector - especially in agriculture, animal husbandry, and services - they are excluded from the safety net provided by formal social security programmes.
Most countries have laws that protect women from discrimination. Often protection is embedded in the constitution and is in line with the UN Convention on the Elimination of All forms of Discrimination against Women (1979). Only seven UN member states have not ratified the Convention: Iran, Nauru, Palau, Somalia, Sudan, Tonga and the United States. Article 11 of the Convention stipulates that “State Parties shall take all appropriate measures to eliminate discrimination against women in the field of employment”.
On top of complying with national laws, MNCs generally have explicit policies prohibiting discrimination on the basis of gender as well as practices to prevent discrimination. If these policies and practices fail and a company is found to be discriminating against women it may lead to serious financial and reputational consequences. Litigation could result in a company paying large legal costs, fines or compensation. The negative publicity resulting from a lawsuit could lead to financial and reputational consequences including brand contamination.
Some cases include:
Beatrice A/P AT Fernandez v. Sistem Penerbangan Malaysia & Anor:16 In 1991, national airline company Malaysian Airlines (MAS) was taken to court by employee, Beatrice Fernandez. She was concerned about the right to a family life as her collective agreement compelled her to resign if she became pregnant. If she did not, she faced dismissal. Although Ms. Fernandez lost the case, MAS subsequently reviewed its policies and in 2005, increased the permissible family size from two to three children. Critics, however, point out that despite improvements, unmarried stewardesses and those with less than five years experience still can be terminated if they become pregnant.
Equal Opportunity Commission v. Wal-Mart Stores, Inc: In 2001, Walmart was taken to court by the US Equal Employment Opportunity Commission (EEOC) to correct unlawful employment practices on the basis of gender. These practices were uncovered after the EEOC investigated complaints made by a number of female applicants who applied for a job at a Walmart warehouse based in Kentucky. Representing these female applicants, the EEOC claimed that these women were excluded from working in the warehouse as supervisors hired men over and above women who were equally or better qualified. An EEOC expert estimated that between 71% and 82% of female applicants were rejected for the job.
On 1 March 2010, a week before the trial, Walmart settled. It agreed to:
Upon settlement, Acting EEOC Chairman Stuart J. Ishimaru said that employers in the US are still blatantly excluding women from particular jobs on the basis of sex. This is more than 40 years after the Equal Pay Act and Title VII of the Civil Rights Act were enacted. Furthermore, he stated: “Let this major settlement serve as a warning: Employers must stop engaging in these outdated and sexist practices, or they will face severe legal consequences”.18
Even when allegations of gender discrimination do not result in legal action, companies can still face a range of non-legal risks. These can be of a short term nature (e.g. brand contamination) or long term (e.g. sustained consumer campaigns that may damage market share and ultimately require a company to change its discrimination policy).
These risks include:
For example, in June 2006, the Norwegian Pension Fund – the largest pension fund in the world – divested US$285 million worth of Walmart’s shares due to human and labour rights violations both within its US operations and its supply chain. Infringements on women’s rights were related to treatment in the work place and unequal remuneration for similar roles.19
A company would also be well advised to engage in human rights due diligence to a level commensurate with the risks of gender discrimination within its own operations and, if the company deems appropriate in the circumstances, its supply chains. It will then be better able to design policies and practices that impact positively on gender issues that are relevant to the company in order to discharge its responsibility to respect human rights.
Companies can seek specific guidance on this and other issues relating to international labour standards from the ILO Helpdesk. This aims to help company managers and workers understand the ILO approach to socially responsible labour practices and to assist in the development of good industrial relations.
Other actions that responsible business might take include:20
If feasible, a company should consider developing and implementing human rights policies in order to provide a foundation for a socially responsible approach to the elimination of gender-based discrimination in the workplace. A useful starting point for policy formulation in this realm is the UN International Fund for Women’s ‘Women Empowerment Principles’. These principles, launched in March 2009, set out concrete actions informed by real life business practices aimed at forestalling inequality within the workplace.
A company may commit to:
The Gender Equality Project is a Foundation that works with the World Economic Forum to help create equality between men and women in all aspects of economic, political and social life. It aims to close the gender gap by encouraging corporations to become certified under its label. This label and underlying standards is currently being developed with the assistance of 10 multi-national companies.
Certification will be based on a comprehensive assessment methodology aimed at a company achieving gender equality. The methodology will focus on five areas including equal pay for equivalent work, training and mentoring and company culture. This will be launched in January 2011.
Provide staff training to employees on company-wide policies, which can include policies and practices with respect to gender. It may be advisable that training is provided during work hours, to ensure access to all. Any policy changes can also be disseminated to all employees through this training and made easily accessible.
Chemical Industries Development, a leading Egyptian pharmaceutical company, includes gender training in its annual yearly training plan provided during working hours. Moreover, the training manuals are placed in the library for easy employee reference. An additional manual was developed to include all gender equality policies and was distributed across all departments.21
A socially responsible company may establish programmes that promote access to skills development training for women employees, especially in occupations that are male dominant. If feasible, a company should try and ensure that training provided to workers is accessible to all women, including those with family responsibilities.
Standard Chartered has a ‘Women in Leadership’ development programme that provides guidance and coaching to help talented women advance within the bank.
In countries where women are not given access to a basic education, programmes could include both workplace, as well as life training.
In 2003, MAS Holdings launched its ‘Women Go Beyond’ programme in Sri Lanka and India to equip women working in the company with both work and life skills. Training includes English and IT classes, legal training, financial management and ‘managing multiple roles’ training. Evidence shows that life training empowers women and gives them the confidence to better manage their lives which, in turn, results in higher productivity in the workplace.
If feasible, a panel could be constituted to address gender issues. Ideally, the panel would include a member of the board, upper and middle management, as well as female and male employee representatives. The panel could be used as a tool to identify any barriers to employment or the advancement of women. The company can then undertake measures and strategies to meet any challenges.
In 2007, Standard Chartered set up a Group Women's Council to drive the Bank's gender diversity strategy. This includes sponsoring a ‘Women in Leadership’ development programme. As a result of the programme, women currently make up: 46% of the Standard Chartered total workforce; 17% of global senior management positions; and 51% of the global graduate intake, including female CEOs in diverse markets such as Lebanon, Zambia and Jersey.
A company might develop grievance mechanisms and procedures to address complaints, handle appeals and provide recourse for women who have faced discrimination. Depending on a company’s resources, these mechanisms can take the form of a telephone ‘hotline’, complaints box, or through the appointment of a gender representative.
It is advisable that the company clearly communicate that these mechanisms:
Where discrimination is identified, it can be discussed with workers’ representatives to find possible solutions to the problem while still respecting confidentiality in particular cases.
Furthermore, if domestic violence is materially affecting productivity within a company, it may be advisable for the company to provide support in the work place for those experiencing violence in the home.
Liz Claiborne, for example, has developed policies and procedures to make the workplace safe for employees who suffer from domestic violence. It has created an Employee Assistance Program in the US and has implemented policies that promote employee safety, including providing secure work areas and escorting employees to and from their transportation when they leave and arrive to work.
Where appropriate and feasible, a company may create structures in the workplace which provide family friendly working conditions.
Family friendly structures can include:
Introducing family friendly structures may also give rise to a gradual change in cultural attitudes, by weakening the traditional barriers that hinder mothers from working.
IBM is a company that provides flexible working conditions, including the option to work remotely. It also has 100 day-care centres across its operations. Standard Chartered is another company that has introduced practices to allow employees to balance both work and personal commitments. One practice includes home working arrangements in the US, UK, Singapore, Malaysia and India.
Safaricom Limited, a leading Kenya-based leading provider of converged communication solutions, has gone to great lengths to ensure that the needs of its working mothers are well met. Through adoption of various best practices in creating a mother-friendly environment, Safaricom has ensured that the needs of a working mother are amply met over and above the market trends.22
When companies are moving operations into regions where gender discrimination is culturally embedded and clearly not in-line with company policy, it may be advisable for it to join government-led or supported initiatives. Taking a collaborative approach ensures compliance with national legal standards and facilitates government endorsement.
In Egypt, for example, the government, in partnership with the UN and other international organisations, created the ‘Gender Equality Model Egypt’ (GEME).23 GEME provides private firms with the training to document gender disparities, take corrective action in particular cases, and institutionalise gender equality. Firms self-select into the project, but GEME requires that their human resource departments have sufficient resources so they are able to implement gender equity policies and monitor the results. Ultimately, outside auditors monitor the firms’ human resource practices with an impact evaluation component that determines best practices for use throughout Egypt.24
This model was based on a Mexican model, implemented in 2003 (with assistance from the World Bank).
At the conclusion of the project in 2005 participating firms reported:25
According to the Maplecroft's Women's and Girls' Rights Index 2012, the 10 highest risk countries (all of which are considered to present an ‘Extreme Risk’) are:
| Iran | Somalia |
| Sudan | Syria |
| DR Congo | Saudi Arabia |
| Afganistan | Burundi |
| Haiti | Nigeria |
The Women's and Girls' Rights Index measures the severity and prevalence of violations against females, with particular attention paid to discrimination in the workplace.
Women continue to be under-represented in senior positions worldwide. Statistics show that of 75 countries for which data is available for 2006, the Philippines is the only country where constitute over 50% of senior officials, legislators and managers. In 42 countries, women constitute less than 30% of this group.26
According to the ILO’s 2004 report, Breaking the Glass Ceiling, contributing factors to the low representation of women in these groups include:
State-sanctioned discrimination (such as gender-biased legislation relating to access to education, credit, land ownership, inheritance rights etc.) renders women unequal in law and therefore unable to participate equally in public life. State-sanctioned discrimination, for example by law enforcement agencies, also restricts women’s access to remedies for violations and fosters the need for companies to provide alternative grievance mechanisms.
Furthermore, state-sanctioned segregation of the sexes in the workplace remains prevalent in many countries and sectors. In part, this segregation is borne from social attitudes about what constitutes a ‘male’ or ‘female’ job and has the effect of ‘streaming’ the sexes (both voluntarily and involuntarily) into separate professions.
The ILO’s 2009 report on Global Employment Trends for Women highlights that the proportion of women employed globally in industry was 18.3% in 2008, as compared to 26.6% of men. Women are increasingly employed in the services sector, which accounted for 46.3% of female employment in 2008, compared to 41.2% for men.28
Despite the entrenched discrimination against females in many countries, women’s participation in the workforce has grown consistently over the past 50 years. In 2008, 40.4% of employees worldwide were women.29 The highest proportion of female employees are found in East Asia (69.3% adult employment to population ratio), followed by sub-Saharan Africa (62.9%).30
In 2007, however, 52.7% of all employed women were working in ‘vulnerable’ roles (such as unpaid family workers and self-employment) worldwide, rising to 83.9% in Sub-Saharan Africa and 85.1% in South Asia.31 In addition, some 60% of the world’s working poor are women, primarily clustered in part-time, contract and other forms of informal or self-employment.
Other human rights that are typically associated with gender and equality include:
Right to an effective remedy (UDHR, Article 8): Women’s right to an effective remedy for human rights violations can be compromised in countries where the judicial system is inefficient or lacks independence, or where authorities such as the police, discriminate against women.
Rights to liberty and security of person (ICCPR, Article 9): Discrimination, cultural practices and a lack of safeguards can result in harassment, threats and attacks against women.
Right to equality before the law, equal protection of the law, and rights of non-discrimination (ICCPR, Article 26): Women experience discrimination in law and practice, as well as in society and in the workplace. This includes discrimination in economic opportunities as well as access to remedies for human rights violations.
Right to family life (ICESCR, Article 10): In some cases, the conditions under which employees work – including issues such as long or irregular hours and inflexible working arrangements – can seriously undermine this right.
Right to work (ICESCR, Article 6): Women can be unfairly deprived of employment or arbitrarily dismissed on the basis of their gender or reproductive status. The right to work is closely linked to the rights of just and favourable working conditions and the right to non-discrimination.
Right to enjoy just and favourable conditions of work (ICESCR, Article 7): Women are frequently paid lower wages than men for work of equal value. The right to enjoy just and favourable conditions of work is closely linked to the right to non-discrimination.
Right to education (ICESCR, Articles 13 and 14): This includes the right of equal access to education and equal enjoyment of educational facilities. Women and girls in some countries lack access to educational opportunities due to discrimination and poverty, thus reducing their chances of employment.
Rights of protection of the family (ICESCR, Article 23): Workplace practices can hinder the ability of working parents to adopt a healthy work/life balance and spend quality time with their families.
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