New rules set requirements for reporting on companies' work with equality and non-discrimination

Public enterprises and private enterprises of a certain size are subject to a statutory activity and reporting obligation related to equality and non-discrimination (ARP). The reporting obligation applies from the financial year 2020 and onwards. Many companies will have to spend time and resources on implementing sufficient systems and routines to comply with the new rules.

The activity- and reporting obligation is regulated in Act no. 51 of 16 June 2017 on equality and prohibition of discrimination (the Gender Equality and Discrimination Act). The law imposes a mandatory working method on employers that includes mapping and managing risks of discrimination and obstacles to gender equality within the company. The work shall take place in collaboration with the employees' representatives. The companies must document the gender equality work and report on the situation on an annual basis.

The regulations apply to i) all public enterprises, ii) all private enterprises that regularly employ more than 50 employees, and iii) all private enterprises that regularly employ between 20 and 50 employees, when one of the working life parties in the enterprise so requires.

The rules shall contribute to fulfilling the Gender Equality and Discrimination Act's overriding purpose of promoting equality and preventing discrimination. An important purpose of the regulations is to prevent gender discrimination, especially when it comes to pay and remuneration.

This article provides an overview of the content of the regulations.

1. The prohibition of discrimination in working life

The Gender Equality and Discrimination Act prohibits employers from discriminating on the basis of gender, pregnancy, parental leave or adoption, care duties, ethnicity, religion, outlook on life, disability, sexual orientation, gender identity, gender expression or other significant matters related to a person.

By "discrimination", the Gender Equality and Discrimination Act refers to direct or indirect discrimination, which has no justifiable basis. Justifiable discrimination presupposes three things: i) there must be a justifiable purpose, ii) discrimination must be necessary to achieve the purpose, and iii) the discrimination must not be disproportionately intrusive towards the person or persons being discriminated against. Justifiable discrimination in the working life also presupposes that the characteristic is of decisive importance for the performance of the work or profession.

The prohibition of discrimination covers all aspects of employment, including job advertisements, employment, relocation, promotion, training, skills development, pay- and working conditions and termination of employment.

2. About the working method

In general

ARP requires employers to follow a specific work procedure in four steps:

• Investigate whether there is a risk of discrimination or other obstacles to equality, including every other year mapping wage conditions by gender and the use of involuntary part-time work,
• Analyse the causes of identified risks,
• Implement measures that are suitable for counteracting discrimination and contributing to increased equality and diversity in the business, and
• Evaluate the results of the work according to points 1) to 3) above.

Step 1: Examine the risk

The first step of the activity obligation consists of examining the risk of discrimination or other obstacles to gender equality in the company.

The employer shall examine the following factors related to gender equality, where the gender share shall be mapped and documented for each of the conditions:

• Gender balance in the company (every other years)
• Salary survey by gender (every other year)
• Use of involuntary part-time work (every other year)
• Proportion of employees working part-time (every year)
• Proportion of employees who are temporarily employed (every year)
• Average taking of parental leave (every year)

The mapping of the gender balance shall include both the total gender distribution in the company and the gender distribution divided into the respective job categories.

The survey of wage differences between women and men shall include the employees' job categories. Both ordinary remuneration and allowances shall be included in the extracts of wage statistics. Any differences can be stated in percentages or amounts. In connection with the salary survey, the company should prepare documentation that defines the various job categories in the company, if this is not available.

By "involuntary part-time", the Gender Equality and Discrimination Act refers to part-time work where the position holder wants and is available to work more. This can be mapped, among other things, through employee interviews or employee surveys.

The employer must also map the general risk in the company of discrimination. This means that the employer must examine whether there are differences that objectively can indicate that there is unreasonable discrimination.

The mapping work will also seek to uncover more invisible obstacles to gender equality, such as attitudes, prejudices and structures. The preparatory work for the Gender Equality and Discrimination Act contains examples of relevant questions that can serve as a starting point for the surveys.

Relevant data sources for the company will include employee surveys, interviews with employees and a review of internal guidelines and routines.

Step 2: Analyse causes

The second work step of the activity obligation consists of assessing the causes of identified risks and obstacles. This means that the employer and the employees' representatives must discuss the background for the actual conditions and / or differences that exist, including whether there may be a connection with the discrimination grounds under the legislation.

It is only the businesses’ matters that are to be considered - matters related to individuals are not to be dealt with.

Step 3: Implement measures

The third step in the work procedure consists of implementing relevant measures that are suitable for counteracting discrimination within the company.

Which measures will be necessary depends on the mapped risks and the reasons for these. The preparatory work to the Equality and Discrimination Act provides guidance that the employer is not obliged to implement disproportionately costly measures.

Step 4: Evaluation of results

The fourth work step consists of assessing the results of the work according to the previous work steps, including deciding on the need to implement new measures.

Ongoing work

The work process according to ARP shall take place on an ongoing basis.

Documentation

The company's work in accordance with ARP must be documented. The documentation should be prepared in parallel with the work process, so that all relevant assessments that have been made can be substantiated. Written documentation may limit any discrepancy between the employer and the authorities afterwards.

The work according to ARP shall be carried out in collaboration with the employees' representatives. Meetings between the employer and employees’ representatives in connection with the gender equality work should therefore be recorded by the employer.

General duty to provide information

In accordance with specified conditions, the employees and their representatives, the Discrimination Tribunal, the Ombud for Equality and Anti-Discrimination and researchers have the right to access documentation on the company's gender equality work.

3. The reporting

In general

On the basis of the gender equality work described above, and in accordance with ARP the company is obliged to report on:

• The actual state of gender equality in the enterprise, and
• What has been done to fulfil the activity obligations.

The preparatory work to the Gender Equality and Discrimination Act provides further instructions on the scope of the reporting. The primary reporting requirements are set out below.

Reporting requirement no. 1: The actual condition regarding gender equality

The company must report the following factors related to gender equality, where the gender share must be mapped and documented for each of the conditions:

• Gender balance in the company (every other year)
• Salary survey by gender (every other year)
• Use of involuntary part-time work (every other year)
• Proportion of employees working part-time (every year)
• Proportion of employees who are temporarily employed (every year)
• Average taking of parental leave (every year)

The company can also report on other issues related to gender equality.

Reporting requirement no. 2: The company's work according to ARP

The company must also report on what has been done to fulfil the activity obligation. This means that the company must report:

• How the company concretely has operationalized the working method according to ARP
• What the employer does to safeguard the interests of gender equality in its personnel policy
• Overview of planned and implemented measures for gender equality in the business

Privacy

Personal information shall not appear in the reporting.

Right of access to the report

According to more detailed terms, the employees and their representatives, the Discrimination Tribunal, the Ombud for Equality and Anti-Discrimination and researchers have the right to access the results of the wage-mapping.

Where to report?

The reporting shall appear in the annual statement / annual report or in another publicly available document, such as publication on the company's website.

If the statement is given in another publicly available document, and the company has a duty to submit an annual report, the annual report shall state where the document is publicly available.

Employers in public enterprises, who are not required to prepare an annual statement, must include the statement in their annual report or in another publicly available document.

4. The board's responsibility

The board of the company has the overall responsibility for ensuring that ARP is complied with.

5. Enforcement

The Ombud for Equality and Anti-Discrimination shall in the first instance check the companies' compliance with the ARP regulations. In the event of non-compliance, the matter can be appealed to the Discrimination Tribunal.

The Discrimination Tribunal is given competence to make decisions and order rectification, suspension or other measures in ARP-related cases. In the event of a breach of the regulations, the Discrimination Tribunal may decide on a coercive fine.

6. Published guidelines

The Directorate for Children, Youth and Families (Bufdir) is constantly publishing new information and guidance from the authorities on how employers must comply with the new regulations. We recommend employers to follow the authorities' guidelines and tools related to ARP, and to seek legal assistance if needed.

7. Practical consequences of ARP

Compliance with the ARP regulations presupposes that employers implement the necessary guidelines, principles and procedures for their gender equality work.

We expect that the implementation will be a cost- and resource-intensive process for many companies. In a long-term perspective, however, it will be an advantage for the companies and their stakeholders that the companies put in place well-functioning, internal frameworks as soon as possible.