As companies pay more and more attention to operating in an ESG-compliant way - in order to take advantage of the resulting market benefits or to comply with legal requirements - the issue of Inclusion, Diversity and Equity (IDE) is gradually coming to the forefront of corporate operations.
Granting equal opportunities plays a prominent role in the European Union: an action plan for the implementation of the European Pillar of Social Rights was published in 2021, which is interwoven with the effort to promote equal opportunities. Within the framework of the action plan, the European Union has adopted new directives, based on which companies also should start preparing for the upcoming regulations. These include:
- Directive (EU) 2022/2381 that aims to create a gender balance among directors of listed companies. The directive stipulates the objective that by June 30, 2026, at least 33% of director positions, or at least 40% of non-executive director positions must be held by the underrepresented gender. In order to do this, companies must take defined steps during the selection process that promote equal opportunities (for example, transparent evaluation and priority for candidates belonging to the underrepresented gender).
- Directive (EU) 2023/970 that aims to strengthen the application of the principle of equal pay for equal work – or work of equal value – between men and women. Member States are required to transpose this directive by June 7, 2026, and companies with 150 or more employees will be required to report by June 7, 2027. The main provisions of the directive are presented in our article: The 2023/970/EU directive was published - The new EU directive on Pay Transparency and its implications for employers
Furthermore, in many cases the EU defines additional action plans and strategies for other areas within the social pillar. These include EU objectives and recommendations for member states.
- The EU anti-racism action plan 2020-2025, the European Disability Rights Strategy 2021-2030 and the Union of Equality: LGBTIQ Equality Strategy 2020-2025 should be highlighted among the EU strategies. These are also worth keeping an eye on, as further legislative steps may follow based on them.
- The EU Disability Employment Package is also important from the point of view of employers. Within the framework of this, the EU provides guidance with various guidelines and information campaigns in order to promote the employment of persons with disabilities.
In addition to the new rules, it is also important to mention that the Hungarian domestic legislation already lays down the requirement of equal treatment, and stipulates that it must be respected by, among others, employers, legal persons or organisations receiving state subsidies, and persons offering to conclude a contract, or providing services or selling goods in premises open to customers.
The requirement of equal treatment aims to protect people who may be treated less favourable on the basis of a characteristic (a so-called protected characteristic), such as gender, racial origin, nationality, state of health, religion, maternity or paternity, gender identity or social origin, or even the part-time nature or definite term of the employment relationship. All these characteristics reflect diversity, and the requirement of equal treatment aims to ensure inclusion by prohibiting less favourable treatment.
In relation to protected characteristics, the law prohibits:
- Direct or indirect discrimination, i.e. where a person with a protected characteristic is treated less favourable or is placed at a disadvantage compared to another person in a similar situation (for example, this may be the case if, without being justified by the nature of the work, only male or only female workers are sought for a job);
- Harassment, i.e. creating an intimidating, hostile, degrading, humiliating or offensive environment in relation to a protected characteristic (for example, making fun of or mocking a person's state of health or religious beliefs);
- Unlawful segregation, i.e. the separation of persons with a protected characteristic from other persons in a comparable situation (for example, this could include placing workers of different racial origins or nationalities in separate buildings);
- Retaliation, i.e. causing or threatening to cause legal harm to a person who makes a complaint or initiates a procedure because of a violation of the requirement of equal treatment (for example, unlawful termination of employment for such reasons).
In addition to the rules on discrimination, it can be seen that ensuring equal opportunities will also be a priority in the EU, while companies will also have an important role to play in granting social inclusion and equality at a national level, even by following EU recommendations. In this way, companies can promote non-discriminatory treatment of workers with protected characteristics in their own micro-environment with reflection to the EU documents by drawing up and consistently implementing equal opportunities plans. Our experts can help you to comply with legal requirements, develop internal equal opportunities policies and deliver diversity-related training for managers, employees and recruiters.
