On December 11, 2013, the Supreme Court of India upheld Article 377 of the Indian Penal Code (IPC) making lesbian, gay, bisexual, and transgender (LGBT) preferences and alliances illegal. The move overruled the Delhi High Court’s 2009 decision to decriminalize LGBT alliances. After the Delhi High Court verdict, many companies expanded their diversity policies to include the interests of the LGBT community. These include creation of interest groups, awareness and inclusion events, and even the creation of transgender toilets within office premises. Organizations are now faced with a peculiar dilemma. Should they continue their inclusiveness initiatives for the LGBT community or will it constitute a criminal offence to support the interest of the group?

To stop or to continue is the key question

According to global human rights standards, the ruling serves as a deterrent to the basic right of privacy and non-discrimination. Early signals show that companies are in a “wait and watch” mode. While companies may consider a change in policy, they have to consider the impact of such changes on morale and productivity of employees. Some companies have taken landmark steps to demonstrate their support and solidarity for LGBT employees like the Gaygler group at Google, IGLU community at Infosys, and EAGLE reverse mentoring project at IBM. The future of many such projects that were launched across the spread of the Indian industry looms uncertain. Research from Stonewall, an organization working for equality and gender justice in the UK, indicates that concealing sexual orientation at work reduces productivity by as much as 30 per cent. The Supreme Court ruling may just propel organizations to put in place measures that discourage employees to reveal their sexual orientation. An independent research conducted by Google, IBM, Goldman Sachs, and Community Business in 2012 suggests that 5-10 per cent of India’s workforce comprises the LGBT community. The enforcement of non-disclosure of sexual orientation translates into an impact, which is sizeable enough for companies to take notice. At this point, companies are faced with the very serious dilemma on if they should continue actively supporting the LGBT community or stall them altogether. Whatever path a company chooses, there are sizeable associated costs that human resources functions have to consider.

What are the alternatives?

Companies may not be permitted to actively support their LGBT initiatives under their employer branding and hence, attracting talent from this community may become more difficult. While it may make legal sense for a company to stop active support and show of solidarity toward LGBT groups, employer brands that have made a reputation as being inclusive and accommodative to the needs of the community may stand at an inherent advantage. Support groups and NGOs have already started planning to move to the Supreme Court to revoke the order. While the future of its status remains indefinite and uncertain, there are several steps that companies need to undertake to ensure that employee rights are protected and they can attract talent from the LGBT community.

There are many costs that organizations can eliminate by continuing their training and sensitization efforts. While it may be illegal for an LGBT community member to publicly proclaim one’s sexual orientation in India, it is unquestionably legal in several other countries. Recent cases have shown that the lack of sensitization may cost a company significantly when business affairs are conducted at a global scale. Some cases were reported where companies have borne costs to the tune of $10 million as a result of bullying or embarrassing an LGBT client or colleague outside India. HR functions in India thus have to manage the difficult proposition of continuing their sensitization efforts while making sure that they do not come across as promoters of LGBT preferences.

The equation may turn out to be a little simpler for the HR function of a multi-national organization. It is a good time for HR professionals in a multi-national organization to work closely with their global counterparts and integrate their India-specific initiatives under a global umbrella. This may also offer a legal recourse to justify the existence of such initiatives within the organization. HR in organizations, which do not have any global presence, may need to continue their LGBT initiatives at an informal level.

Need for stronger anti-discrimination policy

While any explicit changes to internal company policies may not be necessary, it may be a good time for companies to rethink and reword their anti-discrimination policies. As the legislation may encourage bullying and discrimination, the responsibility of HR to ensure that LGBT employees do not face discomfort or discrimination at work becomes even more significant. Tougher wording and communication of the company’s anti-discrimination policy may be needed and the changes have to be reiterated to all employees.

It is also a good time for the organizational HR to track separate score sheets for LGBT employees and identify any red flags that may emerge. These red flags may be in the form of dip in productivity numbers, attendance or engagement scores. Ensuring that the morale and engagement of LGBT employees remain high may warrant the need for periodic personalized counselling sessions. Of course, the support of the senior business leadership through mentions in firm-wide communications can constitute a great symbolic gesture to reiterate the firm’s values of fairness and inclusiveness.

The move to uphold article 377 is being argued as regressive and detrimental by industry leaders and activists alike. Recent events have shown that while other economies are indicating greater intent to accept and uphold the rights of the LGBT community, the Supreme Court’s ruling comes across as a move in the wrong direction. While the coming times will reveal more about how companies continue to accommodate and protect the interests of LGBT employees, it will be interesting to monitor proceedings of the Indian legislative bodies on how they approach the subject. Until then, the skeleton may have to remain inside the closet.