Update on diversity reporting requirements

Analysis

Update on diversity reporting requirements

Changes in the diversity reporting requirements have largely been limited to companies listed on the ASX. However, the Equal Opportunity for Women in the Workplace Amendment Bill 2012 will ‘raise the bar’ for all employers if it becomes law.

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The last two years have seen some significant changes in the diversity reporting requirements. These changes have largely been limited to companies listed on the Australian Securities Exchange. However, the Equal Opportunity for Women in the Workplace Amendment Bill 2012, recently passed in the House of Representatives, will ‘raise the bar’ for all employers if it becomes law.

[This article was written by lawyers from law firm Freehills.]

The Bill requires all employers of over 100 employees to report against ‘gender equality indicators’. Debate on a number of aspects of the Bill is expected in the Senate.

Now is therefore an ideal time for employers to reassess their current reporting processes, and to consider how to measure their organisation’s progress against the new gender equality indicators proposed in the Bill.

Background
 
As highlighted in our [Freehills] update on 15 March 2012, the Federal Government tabled amendments to the Equal Opportunity for Women in the Workplace Act 1999 (the Act) in the Equal Opportunity for Women in the Workplace Amendment Bill 2012 (the Bill) in early March this year.
 
The Bill was passed by the House of Representatives on 18 June 2012 and is now awaiting consideration by the Senate after a report examining the Bill was released by the Senate Education, Employment and Workplace Relations Committee (the Committee) on 10 May 2012. (Refer to: Freehills article ASX diversity reporting requirements.)
 
What does the Bill propose?
 
One of the proposed amendments to the Act is the requirement for employers with over 100 employees to report annually against ‘gender equality indicators’ from March 2013. The new reporting framework urges employers to report on tangible outcomes and practices for gender diversity in the workplace rather than the policies and practices employers already have in place.

The new gender diversity reporting framework proposed by the Bill will complement the existing Australian Securities Exchange recommendations on gender diversity for listed companies. A copy of the Committee’s report can be found online.
 
These recommendations require companies to establish a diversity policy that includes measurable objectives towards gender equality in the workplace and the progress in achieving those objectives.

Industry groups are also lobbying for improvement of gender diversity on company boards. The Australian Council of Superannuation Investors (ACSI) has recently commented that the gender diversity record of Australian company boards needs significant improvement. To this end, ACSI is committed to monitoring gender diversity policies across ASX200 companies. (See: ASCI media release Women on Boards — not there yet.) 

ACSI has also set itself a target of having at least two female directors on every ASX200 board by 2014.

The Business Council of Australia (BCA) and the Australian Institute of Company Directors (AICD) have also recognised that that the levels of women on company boards and in senior management positions are disproportionately low. In 2010, BCA implemented a mentoring program to assist women employed by BCA member companies to rise up the corporate ladder. AICD is also committed to increasing board diversity, both in the short and long term, by conducting mentoring and scholarship programs aimed at helping women achieve greater representation on company boards and in senior management positions.

Key issues in the Bill
 
The Bill’s requirement that employers report against ‘gender equality indicators’ and the way the government proposes these indicators be set (by regulation), has been the subject of controversy.

Some of the key issues that arose in relation to the reporting requirements in the House of Representatives and in the Committee’s report include:
  • the Bill’s impact on business and the additional red tape and bureaucracy it places on employers
  • the penalties imposed on employers who do not comply with reporting requirements — these penalties include publicly ‘naming and shaming’ employers who do not report
  • an overall absence of certainty and clarity in the Bill — Coalition Senators have commented that important aspects of the Bill are reliant on regulations and Ministerial directives yet to be drafted. This could leave the Minister with an unlimited discretion to define key features of the Bill without legislative constraint. One of the key concerns of the Coalition is that the Minister’s discretion could eventually lead to the reporting framework being extended to businesses with fewer than 100 employees.
These key issues will be debated in the Senate over the coming months.

Implications for employers
 
If the Bill becomes law, employers will be required to prepare a public gender diversity report for the reporting period 1 April 2012 to 31 March 2013.

Employers need to further develop their thinking about gender diversity and also focus on how they might measure their organisation’s progress against the proposed gender equality indicators. The gender equality indicators are defined in the Bill to include:
  • gender composition of the workforce
  • gender composition of governing bodies of relevant employers
  • equal remuneration between men and women
  • availability and utility of employment terms, conditions and practices relating to flexible working arrangements for employees and to working arrangements supporting employees with family or caring responsibilities
  • consultation with employees on issues concerning gender equality in the workplace.
Further indicators may be specified by legislative instrument.

Source: This article was written by Kate Jenkins, partner, Lisa Croxford, special counsel, and Hannah Stevens, vacation clerk, Melbourne, Freehills


[Note: This article provides a summary only of the subject matter covered, without the assumption of a duty of care by Freehills or Freehills Patent & Trade Mark Attorneys. The summary is not intended to be nor should it be relied upon as a substitute for legal or other professional advice. Copyright in this article is owned by Freehills or Freehills Patent & Trade Mark Attorneys.]
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