Sex bias lurks behind the SAR's office doors

PUBLISHED : Saturday, 02 October, 2004, 12:00am
UPDATED : Saturday, 02 October, 2004, 12:00am


It used to be that sexual harassment cases would grab the headlines with sordid tales of boorish behaviour or paycheck politics.

This summer, however, newspapers astonished their readers with a jaw-dropping headline figure: US$54 million.

Morgan Stanley paid the huge settlement to hundreds of women who had claimed bias by the investment bank in denying them pay rises and promotions.

Similar cases on both sides of the Atlantic - although of smaller proportion - suggest claims are becoming more prolific. The potential for serious reputation damage and the settlement sums involved are unprecedented.

Just a few weeks ago, Merrill Lynch faced a GBP7 million (HK$97.93 million) claim from the former head of its European private-client business, Stephanie Villalba, for sex discrimination, unfair dismissal, victimisation and unequal pay.

At the same time, it fought a discrimination case in the US brought by a former financial adviser, Nancy Thomas, that dates back to 1997. It was an embarrassing imbroglio for the bank, which had been at pains to put alleged sexual discrimination behind it since settling nearly all 900 claims brought against it in a 1997 class-action suit.

Sex-discrimination litigation in the US has had a head start on smaller financial centres such as Hong Kong. The SAR's equal opportunities law was introduced only in 1995 and its workplace culture is seen as less litigious.

Some recent figures however suggest that local discrimination claims are increasing. A recent survey by law firm Johnson Stokes & Master (JSM) found that nearly one in five companies surveyed had been the subject of an anti-discrimination complaint. One in three of the affected firms reported multiple complaints.

Figures from the Equal Opportunities Commission (EOC) show a doubling of complaints to the anti-discrimination body over the past four years, with a threefold increase in investigations. The JSM survey found that the real-estate sector was subject to the largest number of complaints, with banking and financial services, advertising, information technology and manufacturing also featuring strongly. A total of 273 employers responded to the law firm's poll.

The figures seem to contradict the commonly held belief in Hong Kong that such cases are few and far between. The reality is that most of the battles are fought behind closed doors, through mediation or conciliation.

Settlements often come with a non-disclosure requirement. The resulting lack of publicity makes it hard to paint an accurate picture of just how many companies are flouting the law, and how much victims are being awarded.

Only two types of cases tend to go to court in the first place, says JSM partner Duncan Abate: those involving employers who think they have done nothing wrong and are willing to fight; and those in which the EOC is looking to set a precedent on behalf of a litigant.

Payouts tend to be small by global standards. According to the EOC, the largest payout for a discrimination claim that is publicly available is HK$2.8 million, made in 2000. The settlement went to three individuals who had been barred from jobs - as a fireman, an ambulance officer and a customs officer - because they had relatives who suffered from mental illness.

'There haven't been the huge payouts here,' says Mr Abate. 'Most cases have been settled for sums of money which are not substantial.'

Even in the financial services sector, which has generated the largest settlements in the US and Britain, 'you don't get the same quantum', says Mr Abate. 'You don't get the multi-million.'

With the repercussions largely taking place behind closed doors, there is no constant reminder of the law in the public eye. 'We are very different from, for example, the UK, where everyone knows what their rights are,' Mr Abate explains, although he points to an 'exponential increase' in awareness here.

Barrister John Wright, however, cites a core 'lack of civil awareness', which can in part be attributed to the relatively few cases seen in Hong Kong. As someone who handles a large number of employment-related cases, he is in favour of conciliation and mediation.

Yet he stresses: 'The more important thing is to name and shame. They [the EOC] are only going to catch a small proportion of people who are discriminating.'

Judging by the JSM survey, firms are not too perturbed by the prospect of discrimination lawsuits.

Only one in three had a written policy on the topic, which is seen as the most basic preventative step. Training was also low on the agenda. Just 15 per cent provided any kind of education on anti-discrimination matters.

'I think it's a lack of awareness,' says Mr Abate. 'I think they don't understand how easy it is to put in place a policy. I've seen policies that are three paragraphs long - they are better than nothing.'

While to some it may be the basic benchmark of a socially responsible corporation to put in place anti-discrimination policies, to lawyers it is an important buffer to potential liability.

A biased employee can leave the corporation vicariously liable in the eyes of the courts.

Only an employer who could prove it took steps to prevent such a worker from breaking the law - through a policy or training - would be off the hook.

Judging by the JSM poll, the odds of a company being able to prove this in Hong Kong look decidedly thin.