Read more articles in: Amanda Hyam, Blog, Employment Law

Can businesses be inclusive and compliant? The aftermath of the Supreme Court ruling on biological sex

As Pride Month draws to a close, it is important for businesses that care about LGBTQIA+ individuals not to be seen as engaging in “Rainbow Capitalism”.

This year, considerations of how best to support LGBTQIA+ employees have been further compounded by the Supreme Court’s ruling in April 2025 regarding the definition of a woman for the purposes of the Equality Act.

Many business owners are now concerned that they risk running foul of compliance with the ruling or risk alienating employees, clients, or customers.

We want to help you understand your current legal rights and responsibilities and offer some advice on positive steps forward.

What was the Supreme Court ruling, and how does it affect businesses?

The controversial ruling by the Supreme Court determined that, under the Equality Act, the protected characteristic “sex” is to be interpreted strictly as biological sex, separate from the “gender reassignment” category.

Previously, transgender individuals were also afforded protections and considerations in line with their gender identity, ensuring that transgender women were treated as women and transgender men were treated as men.

The ruling has complicated this matter, to an extent, as there is now no guarantee, for instance, that a transgender woman would be permitted to use women’s facilities or be offered inclusive opportunities aimed at women.

Much of the concern for businesses has centred on the access to single sex spaces, such as bathrooms, given that the ruling was awkwardly vague about how to accommodate transgender individuals.

This lack of clarity has resulted in something of a knee-jerk reaction from many organisations, including Labour, which cancelled its women’s conference for fear of becoming non-compliant.

How can businesses stay inclusive and compliant?

The answer to many businesses’ concerns may lie in a reconsideration of how to engage with existing facilities.

Under the Workplace (Health, Safety and Welfare) Regulations 1992, separate male and female toilets, changing and washing facilities are required unless single-occupancy, lockable rooms are provided.

As there is no ethical way to police whether the person using the toilet is transgender or cisgender, businesses may need to invest in creating single occupancy toilets and changing rooms to enable employees and customers to use the facilities without fear of harassment or a loss of dignity.

Gender reassignment remains a protected characteristic, and the Supreme Court ruling cannot be used as an excuse for employers to discriminate against transgender people.

Similarly, it is worth remembering that people express their gender identity in different ways and that there is no visible way to tell if someone is transgender.

The current political climate is a hostile one, with many transgender people feeling vulnerable as their rights and humanity are debated openly.

For businesses that want to commit to equality, not just “Rainbow Capitalism”, the need to understand different groups in society has never been greater.

It is possible to accommodate and support all your employees and customers while staying compliant.

Further guidance will be given by the Equality and Human Rights Commission (EHRC) soon, but for now engaging in honest, transparent dialogue with staff can help your business find the most appropriate solution.

We are on hand to provide expert legal guidance to ensure that, however you proceed, you remain in full compliance with your legal duties of care.

Don’t discard your employees’ dignity. Speak to our team today!

Amanda Hyam

Head of Dispute Resolution and Employment

I have specialised in Dispute Resolution, Civil Litigation and Employment law for more than 15 years. I understand how daunting the prospect of litigation can be and because of this I am always available to discuss concerns.