Supreme Court Ruling on Sex and Gender: What SMEs need to know

The Supreme Court recently delivered its verdict on the rights of women and men, and the implications of biological sex and gender. And, we have seen plenty of commentary, in some quarters it has been roundly criticised, in others widely praised. But what does it mean for the average employer?

In April 2025, the UK Supreme Court issued a landmark judgment in For Women Scotland Ltd v The Scottish Ministers, affirming that under the Equality Act 2010, the terms "woman", "man", and "sex" refer strictly to biological sex.

This ruling holds significant implications for small and medium-sized enterprises (SMEs), particularly regarding workplace policies, the use of single-sex spaces and the management of competing rights.

Legal Background

The case arose when For Women Scotland challenged the Scottish Government's statutory definition of “woman” for the purposes of gender quotas on public boards, which included transgender women with Gender Recognition Certificates (GRCs).

The Supreme Court unanimously found this approach inconsistent with the Equality Act 2010, which treats “sex” and “gender reassignment” as distinct protected characteristics.

The Equalities and Human Rights Commission (EHRC) subsequently published guidance which, to be quite frank, provided no real steer to employers and just simply rehashed the Supreme Court’s conclusions without providing any real practical help.  They are apparently going to release more detailed guidance in the future which we can but hope will be of more use. 

Key Implications for SMEs

1. Policy and Documentation Review

SMEs should urgently revisit their equality, diversity, and inclusion (EDI) frameworks. Policies, employee handbooks and internal documents should clearly differentiate between biological sex and gender reassignment. In other words, ambiguous or overly inclusive language may now risk legal non-compliance.

2. Use of Single-Sex Spaces

Workplaces that provide gender-specific facilities must re-evaluate access policies. The ruling permits restricting access based on biological sex, but only where such restrictions are proportionate and justified - for example, to protect privacy or safety in changing rooms.

At the same time, employers must continue to respect the rights of transgender individuals under the “gender reassignment” characteristic, including providing suitable alternative arrangements.

3. Protection of Gender-Critical Beliefs

The ruling underscores that holding gender-critical views - such as the belief in the immutability of biological sex - is a protected philosophical belief under the Equality Act. SMEs should take care that staff expressing these views are not subject to discrimination or harassment, providing their behaviour remains respectful and does not infringe on others’ rights.  Indeed, it is increasingly evident that philosophical belief is now a wider definition than before.  Care, therefore, must be taken when people express personal views that may offend others but that in a democratic society are permitted.

4. Training and Compliance Awareness

Given the complexity of the legal landscape, it is important to make sure that both Management and employees understand the updated definitions, and their practical implications, ensuring policies are enforced consistently and lawfully.

Balancing Legal and Ethical Duties

The Court's clarification does not strip transgender individuals of legal protections. Rather, it highlights the need to balance rights carefully. Employers must ensure that adjustments for one group does not result in unlawful discrimination against another. This may involve introducing gender-neutral options, or adopting flexible, individualised approaches.

Action Points for SMEs

• Audit and, if necessary, update EDI policies to reflect the clarified legal definitions of sex and gender reassignment.

• Train Managers and HR teams on the implications of the ruling, focusing on lawful implementation and respectful communication.

• Safeguard freedom of belief, including gender-critical perspectives, while maintaining a respectful and inclusive workplace.

• Review access policies for single-sex spaces, ensuring they comply with both privacy considerations and anti-discrimination laws. The most immediate practicalities of this ruling are about toilets, washing facilities and changing areas.  Many organisations are already moving towards a unisex approach, but it is prudent to ensure that such cubicles are completely contained and preferably have their own washing basins and sanitary bins within them.

• Introduce gender-neutral facilities appropriate to accommodate diverse needs without compromising legal obligations. So, if an employer is relying on using their disabled facilities to provide a gender-neutral approach complete with toilet, hand washing, sanitary bin and changing area, not only must the disabled toilet be independently accessed, it would be best if the signage states it is for disabled, males and females.      

• Establish clear case-by-case protocols for addressing access and inclusion issues in a sensitive and lawful manner.

This ruling represents a pivotal moment in employment law.  However, all of this can be highly problematic for SMEs, who have neither the space nor the money to align their practices and welfare facilities with evolving legal standards, while upholding the dignity and rights of all employees.

We do not recommend that SMEs start worrying about the expense of completely refurbishing their welfare facilities, as there can be some quick wins just by changing signage, where possible.  If, however, an SME employs transgender people, it is perhaps best to speak to them and ask for their opinions regarding what facilities they would feel comfortable using, whilst also balancing the needs of the majority, and this is why reviewing who can access disabled toilets is well worth reviewing.

The guidance provided in this article is just that - guidance. Before taking any action, make sure that you know what you are doing, or call an expert for specific advice