UK Employment Law Coffee Break: Supreme Court ruling on Equality Act definitions, employment update webinar, and our latest HR Pensions spotlight

Supreme Court rules 'woman', 'man' and 'sex' in Equality Act refer to biological sex

In a decision which has attracted significant media attention, the Supreme Court has unanimously ruled that for the purposes of the Equality Act 2010, the definitions of "woman," "man," and "sex" refer to biological sex; a Gender Recognition Certificate (GRC) does not change a person's sex for the purposes of the Act. The case arose from a challenge by the advocacy group For Women Scotland to the Scottish government's guidance that included trans women with GRCs in the definition of "woman" for public board appointments.

The Supreme Court reached its decision that the definitions in the Act refer "to a biological women and biological sex"; to permit certified sex under a GRC to be included within the definition would create inconsistencies and impair the proper functioning of the Act, potentially jeopardising the rights and interests of women. The Act instead recognises sex and gender reassignment as distinct protected characteristics and this interpretation is necessary to maintain clarity and consistency in the application of the Act.

Supporting its reasoning, the court highlighted that provisions relating to sex discrimination, particularly those concerning pregnancy and maternity, could only be interpreted as referring to biological sex; the court arrived at this view finding that the Act is necessarily restricted to biological women given that only they can become pregnant. To do otherwise, the court suggested, would lead to unworkable, impractical and illogical results, which Parliament was unlikely to have intended to be the case.

The court also stressed the importance of clarity and consistency for the purposes of the Act in identifying relevant distinct groups that share protected characteristics, including a shared biology. It concluded that interpreting "sex" as certificated sex would cut across the definitions of "man" and "woman" in an incoherent way, undermining the Act's purpose in this respect.

The court, however, was keen to emphasise that its decision did not leave those individual with a GRC or undergoing gender reassignment unprotected. It highlighted that the Act recognises gender reassignment as a distinct and separate base for discrimination and inequality with its own protection noting that "the interpretation of the EA 2010 (ie the biological sex reading), which we conclude is the only correct one, does not cause disadvantage to trans people, with or without a GRC. In the light of case law interpreting the relevant provisions, they would be able to invoke the provisions on direct discrimination and harassment, and indirect discrimination. A certificated sex reading is not required to give them those protections".

Likewise, the court highlighted that individuals are protected by the sex discrimination provisions where they consider that they have been discriminated against on the basis of their biological sex or on the basis of their perceived biological sex; an example they gave was trans man who is refused a job because he is perceived to be male, will have a direct sex discrimination claim.

What does this mean for employers?

While the facts of this particular case did not relate to a specific employment law scenario, employers will now need to consider the impact of the Supreme Court's decision for them in a number of employment-related respects. These include:

• Provision of single-sex facilities in the workplace, such as toilets, changing rooms and accommodation. Following the Supreme Court's decision, the equalities minister has stated that "the ruling was clear that provisions and services should be accessed on the basis of biological sex" but stopped short of confirming that trans women should use the men's toilets, instead highlighting that many businesses have already moved towards separate unisex (lockable) provision that can be used by anyone (which alleviates the need to take a particular position on who can use single sex facilities). She stated that the Equalities and Human Rights Commission will be setting out additional guidance and revising its statutory code of practice which supports service providers, public bodies and associations (and which will be helpful for employers).
• The Equality Act prohibits unfavourable treatment in relation to pregnancy and maternity in particular circumstances and these protections would therefore apply to a trans man who becomes pregnant.
• Following this decision, biological sex would appear to apply for the purposes of gender pay gap reporting. However, the  statutory guidance on gender pay gap reporting states that "It is important for you to be sensitive to how an employee identifies their gender. The gender pay gap regulations do not define the terms ‘men’ and ‘women’. You should not single out employees and question them about their gender. To reduce the risk of this, try to use information employees have already provided, such as in HR or payroll records. If this information is unavailable or unreliable, find a way to allow employees to confirm or update their gender. For example, invite them to check their recorded gender and update it if needed. If an employee does not self-identify as either gender, you can exclude them from your calculations." In practice, employers are therefore likely to continue reporting on the basis they are currently, unless further specific direction is issued.   
• In relation to equal pay claims the court recognised the difficulties that arise for trans people as a consequence of the requirement in the Equality Act to identify an actual comparator of the opposite sex. Following this decision, a comparator based on biological sex would mean a trans woman with a GRC could not compare herself with a man for the purposes of equal pay, but could potentially pursue a discrimination claim based on being perceived as female.

What should employers do now?

Employers should check their policies and procedures align with the Supreme Court's interpretation of a "woman" as a biological female for Equality Act purposes, as well as reflecting the protections against discrimination based on gender reassignment. Any positive action measures, as well as any reliance on genuine occupational requirements for recruitment, will also need to be reviewed.

Perhaps one of the most significant challenges for employers will be where gender neutral toilets (and other facilities) are not currently provided. Employers will now be faced with the challenge of asking trans employees not to use the single-sex facilities of their chosen gender, with the consequent employee relations and legal risks. 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 and now is a good opportunity for employers to reiterate their commitment to diversity, equality and inclusion for all staff.

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.

Managing your people: Essential insights and immediate actions

Please join us at our next Eating Compliance for Breakfast webinars focusing on "Managing your people". On Tuesday 6 May, our specialist workforce solutions team will be looking at the impact of new regimes for using staffing companies, zero-hours agency workers and umbrella workers and on Thursday 8 May, legal director Phillip Chivers and associate director Natasha Burridge will be looking at employment law in 2025, providing essential insights and actions for employers.

Register for these sessions >

HR pensions spotlight for April: Neonatal care leave and current market events

Employers will have been putting policies in place for neonatal care leave and pay. One question, here, is how neonatal care leave will be treated for the purposes of pensions and death-in-service benefits.

We anticipate that employers will look to extend existing family leave pension and death-in-service benefit arrangements to employees who take neonatal care leave. Pension arrangements usually depend on whether the scheme is trust-based (and, if so, whether it offers defined benefit (DB) or defined contribution (DC) benefits) or contract-based, on whether the employer operates salary sacrifice for pension contributions and on whether the employee is receiving contractually agreed enhanced pay, statutory pay or no pay.

If the employer is offering leave and pay in line with the core statutory requirements, then neonatal care leave will not always be paid. Neonatal care leave is a "day one" right for employees where the baby is born on or after 6 April 2025 and spends seven or more consecutive days in neonatal care, but statutory neonatal care pay is only available if the employee meets certain eligibility requirements. If the employer is offering a more generous benefit, then the question of whether all neonatal care leave is paid and what pay rates apply will depend on that policy.

Death-in-service cover, based on pre-leave earnings, will usually continue whether leave is paid or unpaid.

If the pension or any separate death-in-service scheme is trust-based, then employers should let the trustees know what arrangements will apply so that the trustees can arrange for the scheme rules to be updated to reflect them. It might not be necessary to do this immediately: it might be possible to include the changes in the next deed of amendment and say that they apply from April 2025. This might also be a good opportunity to check with the trustees that the scheme rules reflect all of the family leave arrangements the employer has in place, that is, cover all relevant types of leave and accurately reflect what the employer provides.

If the pension scheme is contract-based (for example, is a group personal pension plan) then the employer should contact the provider to check what communications, if any, are being sent out by the pensions provider.

Employers might also like to ask pension scheme trustees or their pensions provider whether they (the trustees or provider) intend to contact members about current market conditions. Some of the concerns that arose at the time of the Covid-19 pandemic could be relevant again. For example, the risk of DC savers taking rushed decisions about investments that might not be in their best interests in the long term, and of scammers seeking to exploit any uncertainty. DC savers approaching retirement might be particularly concerned if they see the value of their pension savings falling. It could be helpful to remind members about the risks of making rushed decisions and to be wary of scammers. It could also be helpful to signpost sources of advice and guidance. The best way forward is likely to vary, but this would be a helpful question for employers to ask.

If you have any questions about any of the points discussed above please contact Claire Rankin or your usual Osborne Clarke contact.