Employment Eye – January 2026

Sex, gender reassignment, religion and belief, and workplace facilities: What two recent Employment Tribunal decisions mean for employers

Welcome to our January edition of Employment Eye, where we take an in depth look at the recent Employment Tribunal decisions in the cases of Peggie v Fife Health Board & Dr Upton and Hutchinson & Others v County Durham and Darlington NHS Foundation Trust. These cases have brought a renewed focus to how employers manage workplace facilities where protected characteristics of sex, gender reassignment and religion or belief intersect.  

Both Judgments (first instance Employment Tribunal decisions) follow the Supreme Court’s decision in For Women Scotland v Scottish Ministers which clarified that “sex” in the Equality Act 2010 refers to biological sex. Read our article on that case here.

Peggie v Fife Health Board & Dr Upton

Commentary 

The Tribunal partially upheld the Claimant’s claim and found that she had been harassed by the First Respondent in this case. The Tribunal’s decision provides useful guidance to employers regarding interim measures that must be taken when investigating grievances and concerns where there are conflicting fundamental rights between employees.

The Tribunal stressed that gender-critical beliefs, sex, and gender reassignment are protected characteristics which must be balanced carefully.  Further, the Tribunal highlighted that the Supreme Court’s decision in For Women Scotland did not result in it being inherently unlawful for trans employees to be given permission to use facilities that align with the sex they identify with, subject to appropriate application of the Bank Mellat (see below) test where required.

Facts of the case 

This case arose following a dispute involving the Claimant who had raised concerns about being required to share changing facilities with Dr Upton, a trans woman. Fife Health Board (the First Respondent) had permitted Dr Upton (the Second Respondent) to use the female changing room but had no written policy on trans staff and facilities. 

The Claimant raised informal concerns in late 2023 and formal grievances in January and March 2024 regarding First Respondent’s policy of allowing Dr Upton into the changing room and further, specific allegations relating to the alleged conduct of Dr Upton. The Claimant’s grievances were not upheld, and she raised further complaints in May and June 2024 about alleged victimisation. The Claimant commenced proceedings on 13 November 2024 for claims of sex discrimination, harassment and victimisation against the First Respondent and Dr Upton. 

Findings

The Tribunal found that the First Respondent had subjected the Claimant to unlawful harassment, but dismissed the rest of her claims, including those against Dr Upton as the Second Respondent. The Claimant’s success in one element of her harassment claim largely came down to the First Respondent’s inability to satisfy the Bank Mellat test of proportionality during the period of time between the Claimant’s complaint and pending the introduction of new rotas separating the Claimant and Dr Upton’s shifts. 

Additionally, the Tribunal made findings that the First Respondent harassed the Claimant due tounreasonable delays in the investigation, poor handling of allegations, instructing the Claimant to not discuss the case, and by creating a hostile environment through procedural unfairness. 

Bank Mellat Test

The Bank Mellat test is a mechanism by which employers facing conflicting fundamental rights between individuals can seek to balance those rights in the workplace, and includes the following four limbs:

1. Whether the objective of the measure in question is sufficiently important to justify the limitation of a protected right;
2. Whether the measure is rationally connected to the objective;
3. Whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective; and
4. Whether the measure’s contribution to the objective outweighs the effects on the rights of those to whom it applies. 

In reaching its decision, the Tribunal also considered additional factors, including:

1. “The views of staff as expressed to the employer;
2. How many do so, and in what terms;
3. The stage of transition that the trans person has reached including what, if any, changes to the physiological attributes of sex the person has made and which the trans person chooses to inform the employer of;
4. The trans person’s appearance as observed by others;
5. The wishes of the trans person;
6. The options where other facilities exist; and
7. What the employer knows or ought reasonably to know.”

Hutchinson & Others v County Durham and Darlington NHS Foundation Trust

Commentary

The Tribunal found that an NHS Trust which allowed a trans woman to use the female changing facilities in line with gender identity was liable for indirect sex discrimination and harassment on the grounds of gender reassignment and sex. In its application of the Transitioning at Work Policy, the Trust was found to prioritise the perceived rights of trans employees to use facilities based on gender identity over the rights of employees (including those with gender-critical views) to use single-sex facilities. 

This case highlights the importance of conducting meaningful risk assessments, equality impact assessments and considering proportionality of relevant policies to mitigate risk. 

Facts of case

Eight female nurses brought claims against their employer after being required to share female changing facilities with a transgender colleague, Rose Henderson, under the Trust’s ‘Transitioning in the Workplace Policy’. In accordance with Trust policy, staff were required to change into their uniforms on site. The women’s changing room was a shared, open facility used by hundreds of women. 

The Claimants raised complaints from summer 2023 onwards regarding privacy, dignity and discomfort they felt when they were required to undress in the presence of a trans colleague. A formal letter of complaint signed by 26 nurses was lodged in April 2024. 

Findings

The Tribunal upheld claims of harassment related to sex and gender reassignment and indirect sex discrimination. In particular, the Tribunal found that:

• Requiring female staff to share a changing room with a biological male created a hostile, humiliating and degrading environment, in breach of section 26 of the Equality Act.
• The Trust’s Transitioning in the Workplace Policy amounted to an indirectly discriminatory provision, criterion or practice (PCP) that put women at a particular disadvantage, which was not a proportionate means of achieving a legitimate aim.
• The Trust failed to carry out a meaningful assessment of the impact on female staff and gave inadequate weight to their privacy and dignity.
• While the transgender colleague themself was not found to have acted improperly, the liability lay with the employer’s policy and its implementation.

The Tribunal made no findings against Rose Henderson personally regarding alleged improper conduct and dismissed all victimisation claims, finding that the alleged detriments were not done because of protected acts. 

Key Takeaways

• Trans inclusive facility policies may be objectively justifiable where the proportionality test in Bank Mellat v Her Majesty’s Treasury (No. 2) [2013] UKSC 39 is satisfied.
• Application of the Bank Mellat test must be fluid, meaning employers will need to satisfy themselves that at all relevant stages they satisfy each of the four limbs of that test.
• One size does not fit all, all cases hinges on the facts and that is how employers must operate at the moment in the absence of EHRC guidance.
• Employers should take proactive steps now to reduce legal risk, including:
  • Reviewing policies on workplace facilities;
  • Avoiding one-size-fits all approaches. Policies should not assume automatic access to single-sex spaces based solely on gender identity, nor should they include blanket exclusions. Proportionality and context are critical;
  • Carrying out meaningful risk and equality impact assessments;
  • Consulting appropriately;
  • Providing genuinely suitable alternatives where possible;
  • Training managers on handling competing rights in the workplace—in particular managers should understand that balancing protected characteristics is complex and legally sensitive, and that poor process itself can amount to harassment;
  • Acting rapidly on concerns or grievances which are raised and considering whether to take balanced and proportionate interim measures applying the above principles; and
  • Ensuring investigations are prompt, fair and proportionate.

Employment law 2025 - 2026 – keeping you and your organisation up to date

There have been a number of notable developments since November’s edition of Employment Eye - below is a short recap on some of those developments.

• 27 November 2025 – The Government agreed to reduce the current qualifying period for unfair dismissal claims from two years to six months. In addition, the Government stated that the  compensation cap would be removed entirely.
• 1 December 2025 – The Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) (Amendment) Regulations 2025 came into force. These regulations double the maximum period for Acas Early Conciliation from 6 weeks to 12 weeks.
• 3 December 2025 – In the case of Kelly v Leonardo UK Ltd, the Employment Tribunal dismissed claims of harassment on grounds of sex, as well as direct and indirect sex discrimination, brought by a female employee on the basis of Leonardo’s policy permitting access to toilets based on gender identity rather than biological sex.
• 18 December 2025 – The Employment Rights Bill receives Royal Assent and became the Employment Rights Act 2025. The new Employment Rights Act lays out a multi‑year programme of reforms that will reshape the employment landscape. For further details, please take a look at our Employment Rights Act 2025 Hub, a dedicated resource offering tools, guidance and relevant updates as the reforms develop.
• 18 December 2025 – In the case of Bailey v Stonewall, the Court of Appeal confirmed that Stonewall did not cause or induce discrimination (or attempt to do so). This case provides important clarification on what it means to “cause” or “induce” discrimination under section 111 of the Equality Act 2010. Please see our ‘In the Spotlight’ post for further details.
• 19 December 2025 – In the case of  Micro Focus Ltd v Mildenhall, the claimant brought claims of unfair dismissal and for a protective award for Micro Focus’ failure to collectively consult – alleging that Micro Focus were proposing 20 or more redundancy dismissals within a 90 day period. He also relied on redundancies across different group companies. The Employment Appeal Tribunal clarified:
  • that redundancies proposed by the same employer can only be counted; and 
  • there is no requirement to look both backwards and forwards over a 90‑day period. Meaning that earlier redundancies do not need to be aggregated with later ones unless, at the relevant time, the employer is proposing 20 or more dismissals within 90 days.
• 29 December 2025 - The Paternity Leave (Bereavement) Act 2024 (Commencement) Regulations 2025 brought into force the whole of Paternity Leave (Bereavement) Act 2024. The Act makes provisions about paternity leave in cases where a mother, or a person with whom a child is placed or expected to be placed for adoption, dies.
• 7 January 2026 – The Government published the first of its updated impact assessments on the Employment Rights Act 2025:
  • Economic analysis
  • Restricting the use of "fire and re-hire" practices

If you would like further information on any of the topics discussed in this article, please contact a member of the Employment, Pensions and Immigration department who will be happy to help.

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