The Code of Wages 2019 and what it means for EEO in India
A key aspect of the Code of Wages, 2019 (Wages Code) relates to ensuring pay parity and EEO conditions at the Indian workplace on the ground of gender. This includes ensuring that there is no discrimination in an establishment among employees on the grounds of gender in matters relating to wages by the same employer in respect of the same work or work of a similar nature done by an employee. Further, an employer cannot make any discrimination on the ground of sex while recruiting any employee for the same work or work of a similar nature and in employment conditions, expect where the employment of women in such work is prohibited or restricted by or under an existing law. This article attempts to break down the relevant provisions for the purpose of the Indian workspace and EEO matters.
The Wages Code provisions seek to replace the erstwhile provisions of the Equal Remuneration Act, 1976 (ER Act). Importantly, the Wages Code uses the term “gender” as compared to “sex”, as seen under the ER Act. The Wages Code now includes “experience” while determining if work performed by a gender is “same work or work of a similar nature”, thus broadening the earlier aspects of skill, effort and responsibility required under the ER Act.
The changes brought in by the Wages Code in relation to EEO will need to be viewed critically on what they seek to achieve versus what a long-overdue rehaul of India’s existing labour laws could have resulted in. As per the World Economic Forum’s Global Gender Gap Index 2020 (https://www3.weforum.org/docs/WEF_GGGR_2020.pdf, WEF GGG Report 2020), covering 153 economies, India now ranks 112th on the overall Global Gender Gap Index, with the country having closed two-thirds of its overall gender gap (score of 66.8%) . This is down 4 places from the 2018 rank of 108. More alarmingly, the WEF GGG Report states that the economic gender gap has gotten significantly wider since 2006. Among the 153 countries studied, India is the only country where the economic gender gap is larger than the political gender gap. Only one-quarter of women, compared with 82% of men, engage actively in the labour market (i.e. working or looking for work)—one of the lowest participation rates in the world (145th). Further, female estimated earned income is a mere one-fifth of male income, which is also among the world’s lowest (144th).
Women only account for 14% of leadership roles (136th) and 30% of professional and technical workers. This needs to be considered in view of the ratio in relation to gender gaps in education, where the share of women attending school is systematically larger in India than the share of men but literacy rates are skewed, with only two-thirds of women being literate as compared with 82% of men.
I also looked at the figures on a global basis and see that over 30% of the global labour force participation gender gap has yet to be closed. Also, within the labour market, gender gaps tend to widen together with seniority level. Globally, 36% of senior private sector’s managers and public sector’s officials are women, while the presence of women on corporate boards or as top business leaders is even more limited: only 18.2%1 of firms globally are led by a woman, and on average, 22.3% of board members in OECD countries are women, with an even lower representation in emerging economies – India stands at 13.8%.
India currently has about 48% of its 1.4 billion population as women. This quite obviously will make up a significant percentage of the labour force, both in the organised and unorganised sector. Thus, the retention of the equal employment opportunity provisions under the Wages Code are critical.
There has been some criticism where the Wages Code has not elaborated on the employment conditions where gender parity is required, as seen under the ER Act which listed promotions, training, or transfer. However, I believe that the intention of the Wages Code remains the same. What is now imperative is for employers to holistically look at their workforce and ensure that there is genuine EEO conditions at work, with the elimination of gender stereo typing and gender biases, not only towards women but to other genders as well.
Coming to the aspect of the Wages Code using the term “gender” as compared to the concept of only protecting women or “the opposite sex” under the ER Act, this is a progressive move to ensuring genuine EEO at the workplace. The distinctions between gender and sex have been removed under the Wages Code, thereby guaranteeing better protection to varied genders across the spectrum. The Transgender Persons (Protection of Rights) Act, 2019 (Transgender Rights Act) bans unfair discrimination against transgender people inter alia in employment but this law comes with the requirement of legally certified gender (a matter to be dealt with separately). Strictly speaking, the Wages Code should assist in ensuring that the Transgender Rights Act provisions are upheld. However, this again will narrow down to a company’s intention of ensuring inclusion and diversity in its absolute form, not curtailed by legal requirements as may be seen under the Transgender Rights Act. In my view, the use of gender instead of sex under the Wages Code is a move in the right direction to inclusion and diversity. I recognise that there could have been a more nuanced approach to including aspects such as sexual orientation within the scope of the Wages Code, which has unfortunately not been made. Reliance will then need to be placed on case law for these matters going forward.
The Wages Code is expected to become effective early 2021. Companies have enough time to revisit their polices and business projections to create a genuine EEO environment and not paper policies for I&D, also incorporating gender sensitization workshops for mid and senior level employees, where I perceive a distinct gap. Looking at the employability of skilled and experienced genders across board in the current economic environment is something that India Inc. needs to take a long, hard look at – irrespective of what the glass ceiling figures currently state.