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Transgender: a new frontier in workplace diversity

3 April 2017

Transgender: a new frontier in workplace diversity

Michael Starkey, Associate

When it comes to the new frontier of workplace diversity, few issues stand out as prominently as the rights of transgender individuals, and the associated practical and cultural challenges for employers in ensuring that those individuals are supported in, and given every opportunity to contribute to, their workplace without risk of harassment, discrimination or victimisation. The need for employers to face up to those challenges was recently highlighted by The Report of the 2015 U.S. Transgender Survey, the largest survey of transgender people ever conducted, involving almost 28,000 individuals, and released in December 2016. It reported that, “in the year prior to completing the survey, 30 per cent of respondents who had a job reported being fired, denied a promotion, or experiencing some other form of mistreatment in the workplace due to their gender identity or expression, such as being verbally harassed or physically or sexually assaulted at work”. This article will explore the ways in which transgender rights at work are evolving (albeit unevenly across the globe), the challenges for employers when it comes to transgender issues, and how employers can capitalise on those challenges in order to create workplace cultures in which diversity and its benefits are embraced.

Evolving legal rights

It is in the realm of anti-discrimination law that the rights of transgender individuals at work are most rapidly evolving. However, the nature and extent of legal protections for transgender individuals in employment varies significantly across the globe.

A global snapshot


At the federal level in Australia, discrimination by employers specifically on the basis of an individual’s gender identity has been unlawful since 2013. All Australian States and Territories, with the exception of the Northern Territory, also explicitly make unlawful discrimination on the basis of gender identity, and in some of these jurisdictions these protections have been in place for some time.

Under federal legislation, employers have a responsibility to take all reasonable steps to prevent such discrimination (which may include harassment or victimisation) in the workplace and may be found vicariously liable for discrimination engaged in by their employees, unless they have taken all such steps. In effect, to avoid liability, Australian employers should have policies on transgender discrimination and harassment, thoroughly implement and train their employees in respect of these policies, and react swiftly to investigate any alleged discrimination or harassment.

On the topical issue of the use of toilets and other facilities, Australian anti-discrimination laws require employers to support transgender employees to use the toilets of the gender with which they identify, and employers run the risk of a discrimination claim by denying transgender employees access to appropriate toilets and facilities. Individuals who believe they have been discriminated against on the basis of their gender identity may complain to the Australian Human Rights Commission (or an equivalent State or Territory agency) in respect of that discrimination, and have the potential to be awarded compensatory damages in the event that such a complaint is ultimately successful in court. The treatment that an individual receives at work may also be the subject of proceedings under national labour laws if that treatment amounts to an unfair dismissal or a form of adverse action.

The United States

In the United States, there is no federal law which explicitly prohibits discrimination on the basis of gender identity. However, federal courts have held that discrimination on the basis of a person being transgender can constitute unlawful discrimination on the basis of sex. A number of States also have laws that prevent discrimination on the basis of gender identity.
However, in certain other States, transgender rights continue to be limited. Perhaps the most high profile situation in 2016 was with respect to North Carolina, where a law was passed to (among other things) prevent transgender people who have not taken surgical and legal steps to change their gender from using public restrooms of the gender with which they identify. While the law does not extend to private companies (which are able to continue to develop their own policies in respect of transgender rights in the workplace), the North Carolina situation highlights a greater degree of uncertainty surrounding transgender rights in the United States than in places such as Australia (particularly given the often robust relationship between State and Federal legislatures in the United States).


In China, there is no specific law or regulation that protects employees against discrimination on the basis of their gender identity.
In 2016, transgender rights in employment were placed under the spotlight in China after a transgender male brought a case before an arbitration panel against his employer on the basis that his employment was terminated on the basis of his gender identity. The complainant produced evidence of a sound recording in which he was told by his manager that wearing male clothing in the workplace would damage his employer’s image, and alleged that he was dismissed on this basis.
The arbitration panel rejected this evidence, holding that the conversation did not represent the employer’s intent because the manager did not work for the company’s personnel department, and accepting that the employer’s reason for dismissal was that the employee did not have the required skills for the job.

Transgender discrimination: what does it look like?

Whether unlawful or not, discrimination against transgender individuals may take many forms, including, but not limited to:
(a) refusing employment, promotion or training opportunities to a transgender employee because of their gender identity;
(b) refusing to work with, ignoring, bullying, harassing or ostracising transgender employees;
(c) refusing to share toilets and other facilities with transgender employees;
(d) invasive, inappropriate questioning about a person’s physical characteristics or their sex life; and
(e) refusing to use the transgender employee’s preferred name or refer to them by the gender with which they identify.
The challenge for employers in eliminating these forms of discrimination is addressing the underlying factors that perpetuate such practices, such as ignorance, lack of understanding, and prejudice.

Challenges for employers

The law is not the limit

In addressing transgender issues, employers should aspire to adopt best practice strategies rather than be guided by the minimum standards set by the law in their jurisdiction. Employers should adopt the mindset that, as well as being a benefit in itself, workplace diversity produces other tangible benefits for businesses in terms of boosting morale, inclusion, motivation, and creativity, and consequently has a positive impact on productivity and innovation.

Understanding the term “transgender”

One challenge confronting employers is the number of ways in which being transgender can be described. One of the broadest and most inclusive definitions being used is that a transgender person is a person whose gender identity is different to the physical sex they were assigned at birth. While legal definitions of what is encompassed by the term “transgender” may vary from jurisdiction to jurisdiction, in terms of best practice, employers should consider viewing transgender issues at work through a broad lens in order to avoid marginalising those who may identify as transgender despite not qualifying in terms of a legally defined threshold.

Challenging unconscious bias

While it is clear that employers need to take appropriate steps to counsel employees who overtly exhibit prejudice against transgender individuals, employers also need to be aware of and respond to unconscious bias that may exist within their organisations and affect their workplace practices in order to ensure that discrimination against transgender employees does not occur.

Recruiters and people managers should be trained on the nature of unconscious bias (that is, that they may make decisions based on judgments they are unaware of and that are influenced by their background and personal experience) and encouraged to question the reasons for which decisions are made with respect to certain employees or prospective employees. All employment related decision making should be based not on a personal attribute such as gender identity, but on the basis of an individual’s merits. In addition, how “merit” is constructed needs to be examined to ensure that this is not affected by preconceived ideas about what capabilities an individual might bring to the job or whether they will be a good “cultural fit” for a workplace.

Gender identifiers and other terminology

As transgender protections are still evolving globally, there are a number of questions that are yet to be answered about how far the protections afforded by the law extend. For example, in Australia, while it is clear that the tangible detriments outlined above constitute unlawful discrimination, it is less clear what employers are required to do with respect to a variety of administrative matters relating to the employment of transgender employees.

For example, it is not entirely clear whether a person who identifies as transgender, but may not have any official documentation from relevant government agency to confirm this, can insist that their employment records be changed to reflect the gender they identify with rather than the physical sex they were assigned at birth.

In terms of creating a culture which embraces transgender individuals, it is important that employers refer to transgender employees (both in the workplace and in official records, wherever possible) using their preferred name and preferred gender pronouns, and that they require (through policies) that their employees do the same. It is also important that the transgender individual is consulted about which name and pronoun they wish to be used and, for individuals who are transitioning, if and when they would like any change to commence.

Developing meaningful policies

While informing employees through policies that discrimination against transgender individuals is unacceptable workplace behaviour (and unlawful, if that is the case) is important, transgender policies should be as much about fostering inclusivity and support for transgender individuals in the workplace as they are about setting appropriate guidelines for behaviour.
For example, best practice policies often include provisions which make employees aware that their employer will work with them to develop a transition plan if this is desired, and include information about what a transition plan might involve (for example, in respect of communications with other employees about the transitioning employee’s gender identity and decision to transition).

Dealing with potential hostility

Employers also need to be prepared to work with the fact that other employees may express some hostility or animosity towards a transgender individual at work. While acknowledging that some employees might find the situation confronting, ultimately employers need to convey a clear message that inclusion and non-discrimination is the required standard of behaviour of all employees.

Implementing best practice

It is clear that there are a number of challenges facing employers as they work to support transgender individuals at work. By giving consideration to the issues below, employers can best position themselves to embrace these challenges through building workplace cultures that foster respect for diversity in all its forms.

  • Does the business have the right framework in place in terms of policies and procedures, including regarding the disclosure by employees of personal information of a highly sensitive nature?
  • Do any administrative changes need to be made in order to reflect a transgender employee’s preferred gender? For example, to existing employment records or recruitment forms (including by giving employees the option to not specify their gender), and in respect of how the employee is to be referred in terms of name and pronouns.
  • Does any training need to be undertaken (for example, on unconscious bias) to ensure that there is strong leadership in terms of transgender issues?
  • Does the business need to make any changes to ensure that the overall culture of the workplace conveys the support that exists for transgender individuals, including those who may not have yet communicated that they are transgender?

Ultimately, employers need to be aware that the legal landscape globally is evolving, and that some jurisdictions require a proactive response on the part of employers to transgender rights at work. While other jurisdictions may lag behind, there are clear benefits from an inclusive approach to diversity which extends to transgender issues. Positive messaging about and effective implementation of an organisation’s diversity and inclusion strategies can not only boost productivity by creating workplaces in which people of all backgrounds are given the support they need to contribute fully, but can also enhance an organisation’s brand in the marketplace. If the history of movements for diversity tells us anything, it is that employers should get on board now, or risk falling behind the pack.

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