By Vickey Zhou, Eric Yuan, Qiao Peng
In a recent case, a manager of e-commerce giant Alibaba Group Holdings was accused of sexually assaulting a subordinate in August 2021. This case brought the issue of sexual harassment at the workplace into the Chinese public sphere. The police investigated and the manager was dismissed, but Alibaba also took this opportunity to announce the establishment of a "Working Environment Committee" as decision-making body for work-related matters including sexual harassment.
In the same month, the independent judicial report against Democratic Governor of New York Andrew Cuomo was released. The report’s findings concluded that Cuomo’s behavior amounts to sexual harassment under US federal and New York State laws, but the investigation also found that the Executive Chamber of New York State (the Governor’s Office) had failed to report or investigate the sexual harassment complaints, which violated its own policies on responding to sexual harassment. Conclusion: complaint-related procedures and the working environment of the Executive Chamber contributed to the conditions that allowed for the occurrence of sexual harassment.
Although the results of the above two incidents were quite different, they both fueled the concern about the responsibility of employers in sexual harassment cases. In this article, we will analyze an employer's liability for sexual harassment under China’s current laws, and will make recommendations on how companies in China can organize their compliance around this topic.
Employer Responsibility for Sexual Harassment in China
- Sources of Chinese Law
In 2005, the Standing Committee of the National People’s Congress of China ratified the 1958 Convention on the Elimination of Discrimination in Employment and Occupation, formulated by the International Labour Organization (ILO). Article 2 of the Convention requires ratified member states to declare and abide by the promotion of equal opportunities for employment and occupation, and the policy of equal treatment. Under the definition of the Convention, any distinction, exclusion, or preference that undermines equal employment or occupational opportunities or equal treatment based on gender is deemed “discrimination” that should be eliminated by the aforementioned policies.
In 2010, the Ministry of Finance, the China Securities Regulatory Commission, the National Audit Office, the China Banking Regulatory Commission and the China Insurance Regulatory Commission jointly issued the Enterprise Internal Control Application Guidelines No. 4—— Social Responsibility. The Guidelines list "protection of employee rights and interests" as a corporation’s social responsibility, and mandate companies to "respect employee personality, safeguard employee dignity, eliminate gender, ethnicity, religion, age and other discrimination, and protect employees' physical and mental health".
In addition to the above-mentioned general principles and regulations, China’s current effective laws and regulations also contain specific provisions on the responsibilities of employers:
- Article 101 of the Civil Code (implemented on January 1, 2021) stipulates that "If, against the wishes of others, sexual harassment of others is carried out by means of speech, text, images, physical behavior etc., the victim has the right to request the perpetrator to bear civil liability in accordance with the law. Organisations, enterprises, schools and other units shall take reasonable measures such as prevention, acceptance of complaints, investigation and handling, etc., to prevent and stop the abuse of power, affiliation, etc. to commit sexual harassment."
- Article 40 of the Law on the Protection of Women’s Rights and Interests (amended in 2018) stipulates that, “sexual harassment of women is prohibited. The victimized woman has the right to lodge a complaint with the unit and relevant agencies.”
- Article 11 of the Special Provisions on Labor Protection of Female Employees (implemented on April 28, 2012) stipulates that, "In the workplace, employers shall prevent and stop sexual harassment of female employees." Article 15 stipulates, "If the employer violates these regulations, infringes on the lawful rights and interests of female employees, and causes damage to the female employees, it shall be compensated in accordance with the law. If the employer and its directly responsible supervisors and other directly responsible persons commit a crime, they shall be investigated for criminal responsibility in accordance with the law."
- Legal Analysis
Under the law, employers have the obligation to prevent and stop sexual harassment. This obligation includes at least a "reasonable"obligation to have measures for prevention, complaint acceptance, investigation and handling of complaints.
a) Defining "sexual harassment" behavior
Sexual harassment as defined in the Civil Code is not limited to the gender of the harassed person, nor is it limited to the harassment method (speech, text, image etc.). Rather, the core element is whether it is "contrary to the wishes of others". In a Civil Judgment in 2020 issued by a Beijing court, sex was introduced as a basis of discrimination, with reference to "sexual innuendo, sexual provocation, and sexual violence and other behaviors that humiliate one’s dignity."
b) Specific obligations on the employer
According to the Civil Code, employers' obligations are two-fold: prevention and stopping violations, and this should at least include measures for prevention, complaint acceptance, investigation, and handling.
c) Liabilities for breach
As the Civil Code does not provide for legal liabilities of employers for violating Article 101, Article 15 of the Special Provisions on Labor Protection of Female Employees promulgated at administrative level clarifies current legal consequences: if the employer fails to prevent or stop sexual harassment of a female employee, and damage is caused to the female employee as a result, then the employer is liable for compensation.
Suggestions for Compliance Systems to Prevent Sexual Harassment
In response to the issue of sexual harassment, employers can choose policies and structures with different levels of strictness based on their specific requirements for compliance.
- Minimum Standards: Meet Requirements of Current Laws and Regulations
a) Develop a compliance policy against sexual harassment
The policy should include at least (1) the definition of sexual harassment behavior; (2) the stipulation that employees abide by the requirements of relevant policies; (3) the right of employees to complain about relevant behaviors when they encounter sexual harassment; (4) specific reporting and complaint channels; (5) the investigation process for reporting and complaint of sexual harassment; (6) the handling method for the perpetrator of verified sexual harassment cases.
b) Establish a complaint and reporting mechanism
In order to ensure that the mechanism is reasonable and feasible, at least one independent group or committee should be established to receive, investigate and handle employee complaints of sexual harassment. Personal information of complainants should be kept confidential to avoid retaliation.
- Recommended Supplement: International Best Practices
a) Definition of sexual harassment: European Union
The EU’s current definition of sexual harassment can be found in the 2006 Equal Treatment Act (Directive 2006/54/EC). The specific definition is: any form of unwanted verbal, non-verbal or physical conduct of a sexual nature occurs, with the purpose or effect of violating the dignity of a person, in particular when creating an intimidating, hostile, degrading, humiliating or offensive environment.
According to this description, sexual harassment in an unfavorable work environment may include, but is not limited to, sexual language, gestures, jokes, pranks, intimidation, physical violence, or sexually targeted behaviors due to personal gender, and any unwanted behavior linguistic or physical proximity, obvious derogatory remarks, or sexually discriminatory evaluations. The foregoing behaviors cause discomfort or humiliation to the recipient, or work performance is affected. According to this policy, sexual harassment does not need to be as serious and universal as required by law, and specific behaviors only need to be slightly more than minor contempt or minor inconvenience.
b) "Reasonably practicable" anti-sexual harassment policies: According to the ILO
In the ILO’s Violence and Harassment Convention, 2019 (No. 190), the “reasonable practicability” of anti-sexual harassment policy is described as:
- Anti-violence and harassment policies applicable to the work environment should be consulted with employees and their representatives before being adopted and implemented;
- Consider violence, harassment and related psychological risks into the management of occupational safety and health;
- Let employees and their representatives participate in the identification and assessment of risks of violence and harassment;
- Provide relevant information and training to employees and others in a suitable and convenient way.
China has traditionally seen very few sexual harassment cases, but this is gradually changing. International companies that want to operate in a compliant way, should have policies in place not only to prevent sexual harassment, but also to deal with complaints in a proper way. Companies can choose a “lighter” approach in compliance with PRC laws, or a “heavier” approach that meets international standards.
R&P is a full-service law firm supporting business in China. The firm’s compliance department advises and represents clients in all aspects of corporate compliance, including the building of compliance systems, responding to work-place complaints, and dealing with administrative and criminal investigations involving company or employee conduct. For more information on how we can assist you, please write to [email protected] or [email protected], or reach out to your usual contact at R&P.