Why Inclusivity Matters

The Legal Wake-Up Call SMEs Can’t Ignore

In January 2025, the UK Supreme Court issued a landmark ruling clarifying that “sex” in the Equality Act 2010 refers to biological sex, not gender identity. This ruling—For Women Scotland Ltd v Scottish Ministers—has sparked debate, confusion, and fear of missteps across workplaces.

For UK SMEs, especially in service-based, tech, and professional sectors, this isn’t just a headline. It’s a legal and cultural moment that demands thoughtful, proactive leadership. And not just around gender.

As we explore how to update your inclusivity strategy, the bigger question is this:

Are you building a workplace that balances legal compliance with genuine compassion?

The ruling doesn’t erase rights. Transgender and non-binary employees remain protected under the “gender reassignment” characteristic of the Equality Act. But it does mean your policies must be clear, lawful, and unambiguous.

Action:

• Update all diversity and equality policies to reflect that “sex” = biological sex.
• Add language affirming day-to-day respect for names, pronouns, and gender expression.
• Ensure your policy upholds rights and relationships: legality with humanity.

You may have team members with gender-critical beliefs (now protected under law) and others who identify as trans or non-binary. This can lead to tension.

Business leaders must foster dignity for both sides. It’s not about picking a side—it’s about upholding respect.

Action:

• Implement a Dignity at Work clause within your handbook or inclusivity policy.
• Train staff: What’s protected belief? What’s harassment? Where’s the line?
• Address conflict early. Equip managers with the skills to have difficult conversations constructively.

While gender makes headlines, most inclusion policies still miss out on a major area of untapped talent: neurodivergent people (ADHD, autism, dyslexia, etc.).

This isn’t just a moral oversight—it’s a legal and commercial risk. Neurodivergent conditions often qualify as disabilities. Failure to provide reasonable adjustments can lead to unlimited fines at tribunal.

Action:

• Add neurodiversity explicitly to your inclusivity policy.
• Designate a simple process to request and review adjustments.
• Train managers to understand the basics: what might neurodivergent staff need? What is a reasonable adjustment?

Reasonable adjustments don’t need to be expensive or complex. Often they involve:

• Flexible work hours
• Written vs. verbal instructions
• Headphones for focus
• Software tools (spellcheck, screen readers)
• Regular one-to-one check-ins

Set up a 3-step adjustment protocol:

• Employee discloses challenge/need.
• Manager/owner explores simple changes collaboratively.
• Review effectiveness within 4–6 weeks.

Keep a record. Show you took action.

Inclusion isn’t just about compliance—it’s good business. Diverse teams:

• Retain staff longer
• Innovate more
• Solve problems better

Conversely, legal risk from poor policies can cost tens of thousands in fines plus reputational damage.

Action:

• Schedule an annual policy review (or sooner after legal updates).
• Use this moment to relaunch your internal inclusion commitment.
• Consider anonymous surveys to ask: “Do you feel included? What could we do better?”

The Inclusive SME Checklist (For Business Owners Ready to Act)

• Update inclusivity policy to reflect 2025 legal definitions.
• Include gender identity and gender-critical beliefs under protected characteristics.
• Add neurodiversity explicitly to your inclusion strategy.
• Create or update a Reasonable Adjustments Policy.
• Train line managers to handle adjustments & conflict.
• Foster a culture of open dialogue and respect.
• Communicate changes to staff proactively.

Final Word: Inclusion is a Practice, Not a Policy

The best SMEs don’t just stay out of court. They build workplaces where people thrive, think differently, and know they matter.

This ruling is a chance to reset. A moment to lead, not hide. And a catalyst to shape a people-first future—rooted in law, and led with humanity.