Employment Edit: 24 April 2025

Equality Act – definition of sex

In a decision which has dominated headlines in the last week, the Supreme Court has ruled on the meaning of ‘woman’, ‘man’ and ‘sex’ in the Equality Act 2010. The Court determined that these terms in the Act refer to biological sex.

The claim related to statutory guidance regarding gender representation on boards in Scotland. The definition of ‘woman’ in that guidance included a person who had been issued a Gender Recognition Certificate (GRC) recognising their gender as female. The question for the Court to consider was whether that guidance was correct in its application of the Equality Act and the Gender Recognition Act 2004.

Under the Gender Recognition Act 2004, once a person obtains a GRC, their gender becomes ‘for all purposes’ their acquired gender. This general rule is, however, disapplied where the terms of other legislation are inconsistent with the rule. The Supreme Court therefore considered whether the provisions of the Equality Act were inconsistent with the general rule. After analysing several aspects of the Equality Act (including provisions relating to pregnancy & maternity, single-sex services and single-sex associations), the Court determined that the meaning of ‘woman, ‘man’ and ‘sex’ in the Act is biological sex, and not certificated sex. The Court said that any other interpretation would make the Equality Act incoherent and impracticable to operate. Having come to this conclusion, the Court held that the Equality Act disapplies the general rule in the Gender Recognition Act.

The Court stressed that its decision is a matter of statutory interpretation and does not involve setting policy. It also stressed that its decision does not remove Equality Act protection from trans people (with or without a GRC), who remain protected against discrimination on the ground of gender reassignment and may also be able to bring claims for discrimination or harassment on the basis of perceived sex.

The consequences of this decision are complex and should be carefully navigated, with a particular eye on ensuring that all staff feel supported. Updated guidance from the Equality and Human Rights Commission is expected by the summer but the legal position is nuanced and there are various employee relations aspects to consider – employers should make sure they take advice on their particular circumstances.

(For Women Scotland Ltd v The Scottish Ministers)

Equality law call for evidence

The government has launched a call for evidence on a wide of range of equality policy areas, with responses helping to shape the Equality (Race and Disability) Bill. The call for evidence, which closes on 30 June 2025, seeks evidence and views on several topics including questions on:

• how to make the right to equal pay effective for ethnic minority and disabled people
• ways to improve enforcement of equal pay rights, including through a new Equal Pay Regulatory and Enforcement Unit
• the prevalence of combined discrimination (that is discrimination based on two or more protected characteristics) and ways to strengthen protection against such discrimination.

Third-party harassment

Earlier this month, the Chair of the Joint Committee on Human Rights wrote to the government with several queries relating to the third-party harassment provisions in the Employment Rights Bill. As drafted, those provisions would enable an employee to bring a claim against their employer where they have been harassed by a third party in the course of their employment and the employer failed to take all reasonable steps to prevent the harassment.

In his letter, the Chair of the Committee raised a query regarding the lack of an ‘overheard opinions’ carve-out in the provisions. Such a carve-out would remove liability where the alleged harassment was part of an overheard conversation not directed at the employee which involved an expression of an opinion on a political, moral, religious or social matter, which was not indecent or grossly offensive and did not have the purpose of violating the employee’s dignity or of creating an intimidating, hostile, degrading, humiliating or offensive environment for the employee. The aim of such a carve-out would be to protect the right to freedom of expression. Similar provisions were debated in the House of Lords in 2023 before the third-party harassment provisions were removed from the Worker Protection (Amendment of Equality Act 2010) Act passed that year. It remains to be seen to what extent this point or any proposed amendments to the third-party harassment provisions will be debated by the House of Lords as it scrutinises the Employment Rights Bill later this month – see further on this below.

Immigration fee changes for small companies

Certain immigration fees and charges are lower where a company qualifies as a ‘small’ company under the Companies Act 2006. This includes sponsor licence application fees, including for applications under the Skilled Worker and Senior or Specialist Worker routes, as well as the accompanying Immigration Skills Charge for such workers.

From 6 April 2025, the criteria that determine whether a company is a small company have changed. From that date, a company is a small company where it satisfies two or more of these requirements:

• Turnover of no more than £15 million (previously £10.2 million)
• Balance sheet total of no more than £7.5 million (previously £5.1 million)
• No more than 50 employees (unchanged)

Any sponsor which now qualifies as a small company must notify the Home Office via the sponsor management system within 20 working days of the change in rules (on or by 7 May 2025).

Employment Rights Bill handbook

The Employment Rights Bill is due to reach committee stage in the House of Lords next week – during this stage, the Lords will scrutinise the Bill and consider proposed amendments (including any tabled by the government). To keep on top of the Bill as it develops, don’t forget to check out our Employers’ Handbook to the Employment Rights Bill and Beyond. In the handbook, we provide an overview of all the key reforms and what they mean for employers.