UK Employment Law Coffee Break | EHRC 'interim' guidance following Supreme Court ruling, the 'all reasonable steps' defence, and our latest incentives update

EHRC issues interim statement on Supreme Court ruling on the meaning of 'sex'

As has been widely reported, the Supreme Court ruled that in the Equality Act 2010, "sex" means biological sex and that under the Act a "woman" is a biological woman (a person born female) and a "man" is a biological man (a person born male). An individual identifying as trans does not change sex for the purposes of the Act, even if they have a gender recognition certificate.

The decision continues to receive widespread media attention as to its impact across businesses and services. The Equality and Human Rights Commission (EHRC) has stated that it is working "at pace" to incorporate the implications of the Supreme Court's judgment into updated guidance, including a two-week consultation (to be launched in mid-May) on how the practical implications can best be reflected, which will be available in due course. It is also aiming to provide an updated Code of Practice for ministerial approval by the end of June and which will support service providers, public bodies and associations to understand their duties under the Equality Act and put them into practice. It confirms that it remains committed to regulating and enforcing the Act "ensuring protection for all protected characteristics, including those of sex, gender reassignment and sexual orientation".

In the meantime, the EHRC has issued interim guidance to support organisations.

In its interim guidance, it states that it is compulsory in workplaces to provide sufficient single-sex toilets, as well as sufficient single-sex changing and washing facilities where these facilities are needed. Trans women (biological men) should not be permitted to use the women’s facilities and trans men (biological women) should not be permitted to use the men’s facilities, as this will mean that they are no longer single-sex facilities and must be open to all users of the opposite sex. Noting that in some circumstances the law also allows trans women (biological men) not to be permitted to use the men’s facilities, and trans men (biological woman) not to be permitted to use the women’s facilities, trans people should not be put in a position where there are no facilities for them to use and where possible, mixed-sex toilet, washing or changing facilities in addition to sufficient single-sex facilities should be provided. Where toilet, washing or changing facilities are in lockable rooms (not cubicles) which are intended for the use of one person at a time, they can be used by either women or men.

What does this mean for employers?

This interim guidance has been debated in the House of Lords in the context of service providers, with the government indicating that the update is "a snapshot reflection, rather than full guidance" and it is the updated statutory code that will have legal status (albeit that this will relate to service providers). The government expects the EHRC to consult widely, listening to diverse voices, before it publishes its updated code.

The interim guidance highlights the challenge for employers in seeking to deal with the practical implications of the Supreme Court decision. As highlighted last week, accessible toilets are often gender neutral, but requiring trans employees to use these facilities limits their availability to disabled employees as well as leading to consequent issues for trans employees (for example, some may not have disclosed they are trans or will have been previously using the facilities of their chosen gender). Supportive and sensitive consultation with those affected by this decision is likely to assist in reaching the best solution. Employers should remain vigilant in supporting trans employees and ensuring inclusion is not compromised. Engaging in open dialogue and consultations with staff can aid in developing policies that respect legal requirements while upholding the organisation's values of diversity and inclusion.

We also understand that a challenge to the Supreme Court decision to the European Court of Human Rights is likely to be brought.

EAT considers the 'all reasonable steps' defence

Under the Equality Act 2010 an employer is liable for discrimination, harassment and victimisation carried out by its employees in the course of their employment. However, an employer will have a defence where it can show that it has taken "all reasonable steps" to prevent the alleged conduct taking place.

Here, an employee at an NHS Trust sought to terminate his UNISON membership, but his subscriptions were still being deducted. He spoke to the branch secretary at his employer, another employee, seeking a refund but was told this was not possible. He (a white man) proceeded to repeatedly call the branch secretary (a black man) a "f**king muppet" and a "f**king monkey".

The branch secretary brought a tribunal claim alleging unlawful racial harassment, however the tribunal found that the remarks had not been made by the other employee in the course of his employment and, in any event, the employer had taken all reasonable steps to prevent that employee from making the remark or from doing anything of that description.

The Employment Appeal Tribunal (EAT) agreed. While the conversation had taken place during the working day, in an office close to the employee's working area and it related to his membership of a union recognised by his employer, this needed to be balanced against the fact that his union membership was a personal choice and the conversation related to a personal dispute relating to that. The tribunal had correctly considered whether or not the allegations were in the course of employment in its whole context when determining that they were not in the course of employment.

In any event the "all reasonable steps" had been made out in the circumstances; the tribunal had found that steps taken by the employer to prevent such conduct occurring included:

• Induction sessions at which the issue of "acceptable behaviour at work" and the employer's core values of "affording dignity, trust and respect to everyone" (PROUD values) were emphasised.
• Annual performance assessments which covered whether or not an employee was acting in accordance with PROUD values.
• PROUD values displayed on posters around the workplace.
• Mandatory training on equality and diversity run every three years to small groups via a power-point presentation.

Here, the employee who made the remarks had in fact attended his mandatory equality and training diversity only a matter of days before the incident complained of.

What does this mean for employers?

This decision is a useful reminder of the need for employers to assess the risk of discrimination, harassment and victimisation in the workplace and the practical steps that can be taken to potentially combat it.

A previous EAT decision in 2021 reminded employers of the importance in ensuring that their equality and diversity programmes are effective in combatting harassment, including "thorough and forcefully presented training", refreshed at appropriate intervals. In that case, it was found that the training that had been provided to the perpetrator of race harassment, and a number of other employees, including two managers who failed to report matters to HR, was "clearly stale" and required refreshing – "It is not sufficient merely to ask whether there has been training, consideration has to be given to the nature of the training and the extent to which it was likely to be effective. If training involved no more than gathering employees together and saying 'here is your harassment training, don't harass people, now everyone back to work', it is unlikely to be effective, or to last".

Indeed the employer may have been fortunate here that had the conduct been found to take place in the course of employment, the employee complained about had only undertaken his mandatory training a number of days before. However, another tribunal may also have questioned the effectiveness of the training where the alleged discriminatory conduct took place so close in time, particularly where there was a pattern of other incidents in the workplace undermining the quality of the training being delivered.

The decision is of particular significance given the new statutory duty to prevent sexual harassment which came into force in October 2024 which places an anticipatory duty on employers to take "reasonable steps" to prevent sexual harassment in the workplace. This duty will be strengthened under the Employment Rights Bill to one of taking "all reasonable steps". The Employment Rights Bill also expands the existing legal protection in relation to discrimination, harassment and victimisation to cover acts of third parties in the course of employment, unless an employer can establish that it has taken "all reasonable steps" to prevent the conduct complained of.

The bill provides that statutory regulations will expand the "all reasonable steps" requirement in respect of sexual harassment, which may also be of practical assistance to employers when considering their wider duties to prevent discrimination and harassment in respect of other protected characteristics.

Our latest Incentives update

In their latest incentives newsletter, our specialist team cover the important 6 July reporting deadline for companies operating employment-related securities arrangements, mandatory payrolling of benefits in kind delayed until April 2027, and our upcoming webinar on employee ownership trusts. Please get in touch with your usual Osborne Clarke contact or Michael Carter or Anika Chandra if you would like to discuss any of the issues raised.