The latest guidance note published by the Institute’s Ethics, Bribery and Corruption (EB&C) Interest Group is essential reading for organisations and governance professionals seeking to improve their anti–sexual harassment frameworks.

The MeToo movement, which went viral globally in 2017, has helped to raise awareness about sexual harassment and the obligations of organisations to protect employees from the threat of such harassment. Nevertheless, a number of myths surrounding what constitutes sexual harassment and who can be held liable for it still abound.  

A recent paper, published by the Equal Opportunities Commission in Hong Kong, makes it clear that employers’ have responsibilities for creating and maintaining a work environment free from the threat of sexual harassment. The paper – Learn the Law, Know your Rights, Understanding Sexual Harassment – explains that, under the Sex Discrimination Ordinance (SDO), employers can be held liable for any unlawful act of sexual harassment committed by their employees in the course of employment. 

In this context, the Institute’s EB&C Interest Group published a guidance note in October this year providing a useful primer in how organisations can improve their anti–sexual harassment frameworks. The new guidance note (the 12th in the EB&C series) – Sexual Harassment & EOC Code of Practice on Employment – reinforces the point that victims can not only claim damages against harassers, but also their employers.  

It emphasises that this issue should not be neglected by companies and the governance professionals advising them. Aside from any penalties the court might impose on employers in cases of unlawful acts of sexual harassment committed in the workplace, organisations are also likely to suffer significant reputational harm and lower staff morale. 

Three key elements of anti–sexual harassment frameworks 

1. Do you have an anti–sexual harassment policy?

The guidance note, in keeping with the remit followed by all of the Institute’s Interest Groups, focuses on the practical steps organisations can take to improve their performance in this area. It notes that the SDO provides for a defence for employers where they can prove that they have taken ‘reasonably practicable steps’ to prevent employees from committing sexual harassment. 

The first step for many organisations seeking to strengthen their defences against sexual harassment and other forms of workplace-based intimidation will be to formulate a comprehensive anti–sexual harassment policy. This should state that sexual harassment is unlawful and will not be tolerated. 

‘There should be zero tolerance for sexual harassment in the workplace,’ the guidance states. 

The policy should also make it clear that victims have the right to file a complaint and should commit to appropriate investigations and escalations of sexual harassment accusations.  

Having a policy in place is a good first step, but unless the policy is properly communicated to all workplace participants, it will not have the desired effect. The EB&C guidance note emphasises the need to promote the policy through different channels. Ensuring that all staff are aware of the policy will help potential sexual harassment victims feel that they can safely come forward. This is key since victims are often reluctant to lodge complaints with their employer. Another recent paper published by the EOC (Preventing Sexual Harassment in the Workplace – Formulating Corporate Policy on Anti–Sexual Harassment) points this out. 

‘Some victims think that it would not help much even though complaints were made. In addition, some employees are in fear of being regarded as troublemakers or exposing themselves to ridicule or being victimised. Hence, even though a company has not received any sexual harassment complaints from employees, it does not necessarily mean that there is no occurrence of sexual harassment incidents,’ the paper states. 

The guidance note also emphasises the need to review the policy on a regular basis. The guidance note recommends that management considers the following questions when assessing the effectiveness of their anti–sexual harassment frameworks. 

• Has the anti–sexual harassment policy been reviewed or amended since its development and promulgation? 
• When was the last review of the company’s anti–sexual harassment policy conducted? 
• Do all employees and new employees know about the corporate policy on anti–sexual harassment? 
• When was the last training conducted for employees on gender equality and prevention of sexual harassment? 
• When was the last training conducted for the designated employees for handling sexual harassment complaints? 
• As a policymaker, when did you receive your last training on preventing sexual harassment? 
• Has there been any complaint relating to sexual harassment? If so, was the complaint handling procedure followed? 

2. Do you have effective complaint handling channels and procedures? 

Having internal complaint channels and procedures is key to the effectiveness of anti–sexual harassment frameworks. Since this aspect has been covered extensively in earlier Institute guidance notes, the EB&C guidance note does not go into too much detail on this point. It does, however, refer governance professionals to the EOC published materials on this topic. These recommend, for example, that contact information for officers in charge of handling complaints should be included in the anti–sexual harassment policy and there should be clear assurances of confidentiality for anyone coming forward with complaints.

3. Do you have in place appropriate staff training?

Another key component of an effective anti–sexual harassment framework is to ensure that staff have access to relevant training. This should involve holding training and refresher courses for all employees on what constitutes sexual harassment and how to come forward with any complaints. Additionally, officers responsible for receiving and handling complaints should have sufficient training to be able to carry out these functions. 

‘Employees have a part to play in eradicating sexual harassment from the workplace. Employees subjected to harassment should let the harasser know that the behaviour is unacceptable and, if required, report it to management or an employee representative,’ the guidance note states.  

Sexual harassment cases 

The guidance note also discusses three legal cases that are useful in terms of demonstrating the view taken by courts in Hong Kong on sexual harassment cases. 

1. In L v Burton, the harasser was the general manager of a marketing company where the victim was allowed to interview and accept a job offer. The harasser repeatedly made sexual advances towards the victim both before and after she started work, and she was inappropriately touched twice. Every time, the victim turned down the harasser’s advances. When the harasser finally fired the victim when his behaviour towards her deteriorated, he violently grabbed her wrist and bruised it. The victim filed a claim under the SDO against the harasser and was awarded close to HK$200,000 in damages, of which HK$100,000 was for injury to feeling. 

    

2. In an internal disciplinary hearing in Ratcliffe v Civil Service Secretary, a police officer was found to have sexually harassed a female colleague. He then sought a judicial review of the decision. The internal police standards were substantially the same as those under the SDO. In the judicial review, the Court explained that telling dirty stories to someone who does not want to hear them can amount to sexual harassment. On the other hand, overhearing such stories without the teller’s knowledge would not be sexual harassment unless the victim was the subject matter of the stories. 

    

3. In Yuen Sha Sha v Tse Chi Pan, the victim and the harasser were university students who shared a dorm and had been close friends for a long time. After learning that the harasser had secretly installed a camcorder inside her room for an extended period and had videotaped her, including while she was changing clothes, the plaintiff filed a lawsuit against the harasser under the SDO. It was decided that the videotaping by the harasser qualified as ‘unwelcome conduct of a sexual nature’. Damages for injury to feelings, and exemplary and aggravated damages were awarded. 

The guidance note reviewed in this article is available in the Thought Leadership section of the Institute’s website: www.hkcgi.org.hk.  

SIDEBAR: Credits

The Institute’s Ethics, Bribery and Corruption Interest Group members are Dr Brain Lo FCG HKFCG (Chairman), Jeremy Birch, Mary Lau, Michael Chan, Ralph Sellar and William Tam ACG HKACG. April Chan FCG HKFCG, Institute Past President, is Chairman of the Institute’s Technical Consultation Panel with oversight of the Institute’s Interest Groups. Mohan Datwani FCG HKFCG(PE), Institute Deputy Chief Executive, serves as Secretary to the Institute’s Interest Groups and was the author of this guidance note. If you have any comments and/or suggestions relating to the Institute’s thought leadership, please contact Mr Datwani via email: mohan.datwani@hkcgi.org.hk.  

SIDEBAR: Guidance Notes 2023 Roundup

January 

Ethics, Bribery and Corruption Guidance Notes (10th and 11th issues) – Anti-corruption Policies and Ethics Training Disclosure in Environmental, Social and Governance Report (Parts 1 & 2) 

Competition Law Guidance Notes (10th and 11th issues) – Significant competition law cases and need for competition law compliance (Parts 1 & 2)

February 

Technology Guidance Note (8th and 9th issues) – 2022 wrap up and what to expect in 2023 (Parts 1 & 2) 

March 

Mergers and Acquisitions Guidance Note (9th issue) – Takeovers Executive practice change on appointment of receiver or liquidator over a controlling stake 

Public Governance Guidance Note (10th issue) – The need for transparency and accountability of financial disclosures

April 

Company Law Guidance Notes (9th and 10th issues) – The Hong Kong Companies Ordinance and virtual meeting technologies for general meetings (Parts 1 & 2) 

Wealth Management Guidance Note (2nd issue) – Hong Kong’s tax concession regime for single family offices to enhance competitiveness

July 

Technology Guidance Note (10th issue) – An Overview to Facilitate Boards to Manage Cyber Risks

Company Law Guidance Note (11th issue) – Re-domiciliation Regime for Hong Kong 

Securities Law and Regulation Guidance Notes (7th and 8th issues) – Introduction to Hong Kong SPAC Listings (Parts 1 & 2)

August 

Technology Guidance Note (11th issue) – An Overview of Managing The Risks and Opportunities & Responsible Deployment of AI Tools 

Competition Law Guidance Note (12th issue) – Guidance Note on Resale Price Maintenance (RPM)

September 

Securities Law and Regulation Guidance Note (9th issue) – SFC’s Initiatives to Address Cross-Border Insider Dealing

October 

Ethics, Bribery and Corruption Guidance Note (12th issue) – Sexual Harassment & EOC Code of Practice on Employment

November 

Technology Guidance Notes (12th and 13th issues) – Hong Kong SFC’s Newly Implemented Licensing Regime for Virtual Asset Trading Platforms (Parts 1 & 2) 

The above guidance notes are available in the Thought Leadership section of the Institute’s website: www.hkcgi.org.hk.