Explore the UK legal position and main issues for employers on sexual orientation discrimination, gender identity and reassignment discrimination in the workplace
The principal legislation governing sexual orientation discrimination is the Equality Act 2010. Prior to the Act coming in to force on 1 October 2010, the key legislation was the Employment Equality (Sexual Orientation) Regulations 2003 which implemented the sexual orientation aspects of the EU General Framework Directive (2000/78).
The Equality Act has a statutory Code of practice on employment which covers sexual orientation. This and other non-statutory guidance is available on the Equality and Human Rights Commission (EHRC) website.
Acas has published guidance on how sexual discrimination, including on the grounds of sexual orientation can occur in the workplace, how it can be dealt with and how to reduce the chance of future discrimination.
See also our Factsheet on Sexual orientation, gender identity, gender reassignment and employment and our Case law on sexual orientation discrimination.
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Defining sexual orientation
The Equality Act 2010 sets out a number of ‘protected characteristics’ including sexual orientation. The definition of sexual orientation in the Act is the same as under the previous legislation. It means a sexual orientation towards people of:
- the same sex
- the opposite sex
- both sexes.
In other words, people who have been discriminated against because they are gay, bisexual or heterosexual are covered by the legislation.
The following case, Sharon Legg v Rubyz Ltd (2007), illustrates the way in which the law applies to heterosexuals. A female head of security at a gay club established harassment on the grounds of her (heterosexual) sexual orientation under the 2003 Regulations. She alleged the other staff (who were homosexual or bisexual) refused to follow her instructions and subjected her to harassment because she was heterosexual. She was eventually dismissed following a dispute with another member of staff. She won her claim for sexual orientation discrimination, receiving £3,000 for injury to feelings. The Employment Tribunal also awarded her £3,222 for unfair dismissal although the dismissal was not on the grounds of her sexual orientation.
In addition, people are protected against discrimination occurring because:
- of their association with someone of a particular orientation, for example, discrimination against an employee because their child is gay
- they have refused to carry out an instruction to discriminate
- of a perception about their orientation.
Different types of discrimination claim
Sexual orientation discrimination can occur as direct discrimination, indirect discrimination, victimisation or harassment.
Direct sexual orientation discrimination occurs where 'A' treats 'B' less favourably than they would treat other people. For example, direct discrimination would occur at work where an employer refuses to promote an employee because they are gay.
In order to establish a direct discrimination claim, a suitable comparator has to be identified. In a work context, a worker would have to show they had been treated less favourably because of their sexual orientation than another workers who is of a different sexual orientation. For example, if a waiter in a restaurant owned by a gay couple complains that they have not been promoted because they are heterosexual, the correct comparator would be a waiter in the same position save for the fact that they are not heterosexual.
If a real comparator cannot be identified, then a hypothetical one can be used.
Indirect discrimination can be summarised as the application of a provision, criterion or practice which is discriminatory in relation to a person with a protected characteristic, in this case sexual orientation.
Indirect discrimination can be summarised as the application of a provision, criterion or practice (PCP) which is discriminatory in relation to a person with a protected characteristic, in this case sexual orientation.
Indirect discrimination occurs where 'A' applies a PCP to 'B' which is applied equally to persons not of the same sexual orientation but which:
- puts, or would put, people of the same sexual orientation as 'B' at a particular disadvantage when compared with other people
- puts 'B' at that disadvantage and
- cannot be shown by 'A' to be a proportionate means of achieving a legitimate aim.
An example would be a job advertisement which seeks a man and a woman, who must be a married couple, to manage a hotel. This is a criterion which would put homosexual couples at a disadvantage. It is unlikely that the hotel owner would be able to show this requirement pursued a legitimate aim and that it was proportionate.
A person 'A' discriminates against another person 'B' if they treat 'B' less favourably than they treat others because 'B' has:
- brought legal proceedings against 'A' or any other person under the Equality Act 2010
- given evidence or information in connection with any proceedings brought under the act
- otherwise done anything under or by reference to the Act.
An example would be worker 'B' who gives evidence for a fellow worker who has brought a sexual orientation discrimination claim in the tribunal, and subsequently 'B' is not promoted as a result of their support.
The Equality Act 2010 makes it clear there is no need to use a comparator to measure the treatment of the ‘victim’ with another person who has not made or supported a complaint under the Act.
Person 'A' subjects another person 'B' to harassment where, on grounds related to a protected characteristic - for example, sexual orientation - 'A' engages in unwanted conduct which violates 'B's' dignity or creates an intimidating, hostile or degrading environment for 'B'.
Examples would be jokes, nicknames, verbal abuse and physical harassment. In deciding whether conduct has the intimidating, hostile etc effect, tribunals must take the perception of the victim and the other circumstances of the case into account.
Complainants are also protected from harassment because of both perception and association.
Perceived or associative discrimination
Direct discrimination remained essentially unchanged from previous legislation when the Equality Act 2010 which came into force on 1 October 2010 but it was subsequently established that a form of direct discrimination occurs when someone is treated less favourably than another because they are thought to have a protected characteristic (perceived discrimination), or because they associate with someone who has a protected characteristic (associative discrimination).
The Equality Act 2010 makes it clear that associative harassment is sufficient to establish a claim and that employees can also complain of behaviour they find offensive, even if it is not directed at them.
Discrimination against someone because of the perception of their orientation is protected. For example, if a worker is discriminated against because the employer thinks they are gay, then the protection will apply, regardless of whether the worker is gay or not. The complainant does not usually have to disclose their real orientation at any stage, although in most cases the complainant does disclose this.
The discrimination does not have to be because of an employee’s own sexuality but can be because of their association with someone of a particular orientation, for example, discrimination against an employee because their child is gay would also be covered.
Defending a claim
Employers may be liable for any act of discrimination carried out by employees in the course of their employment (including harassment), although the employee will also be personally liable. In some limited circumstances, employers may be liable for acts committed by third parties.
Whether an employer can attempt to justify or defend a claim of sexual orientation discrimination depends upon the precise nature of the claim being brought. It is very difficult to defend a claim for direct discrimination although, very rarely, some employers may be able to show an 'occupational requirement'.
With indirect discrimination claims, an employer may be able to justify their act of discrimination. With harassment and victimisation claims, the employer may have a defence if it can disassociate itself from the acts of its employees.
An employee in a same sex marriage or civil partnership is entitled to the same pension rights as someone in an equivalent heterosexual relationship.
Prior to the Civil Partnership Act 2004, it was lawful to treat married couples differently to those in other partnerships with regard to pension benefits. When the Act came into force on 5 December 2005, pension schemes were only required to count service from that date onwards when calculating survivors’ benefits for same sex married couples or civil partners and this exception was subsequently replicated in the Equality Act 2010.
While many employers opted to treat all employees equally and offered more than the statutory minimum, regardless of sexual orientation, this was on a voluntary basis rather than a legal requirement.
In July 2017, the Supreme Court ruled in the Walker v Innospec case that a spouse in a gay marriage or civil partnership was entitled to a pension calculated on all the years of their partner’s service provided they remained married at the time of the partner’s death. As a result of this case, the legal position changed relating to survivor benefits for same-sex marriages and partnerships. Since then, it has been sexual orientation discrimination and illegal to provide pension benefits calculated on shorter years’ service for same-sex couples than for heterosexual couples.
As a result, public service schemes, for example teachers’ pension schemes, have amended their regulations to provide survivor benefits for same-sex couples (whether married or in civil partnerships) that are equivalent to those for heterosexual couples. The treatment should be the same as that provided for widows, based on a member’s full length of service.
Private pension schemes were advised to get legal advice on how to comply with the Walker judgment as there may be exceptions for those schemes where survivor benefits depend on the correct contributions.
A further case, Goodwin v the Secretary of State for Education (2020), identified that people in heterosexual marriages and civil partnerships may be treated less favourably than survivors in same-sex marriages and civil partnerships.
The employment tribunal looked at survivor benefits in the Teacher's Pension Scheme and concluded that female members in an opposite-sex marriage could be treated less favourably than a female member in a lesbian marriage or civil partnership. This treatment was direct discrimination on the grounds of sexual orientation. The impact was that men who survived female spouses or partners got a lower rate of survivor benefit than a comparable same-sex survivor. Therefore, the Teachers' Pension Scheme Regulations 2010 were in breach of the non-discrimination rule in the Equality Act 2010.
As a result of this case, husbands who survive after the death of a female pension scheme member should have their pension increased, provided that their entitlement to a survivor pension arose on or after 5 December 2005.
Following the Goodwin judgment, the Chief Secretary to the Treasury made a written ministerial statement on behalf of the government on 20 July 2020. The government then changed the Teachers' Pension Scheme to address the discrimination. The government also said other public service pension schemes including the NHS would need changing if the husband or male civil partner of a female scheme member was in similar circumstances. Further details are contained in the consultation on NHS pension schemes.
Can a sexual orientation discrimination claim arise if an employer does not know about an employee’s sexuality?
Yes. The crucial point is that employers must help create a work atmosphere where differences relating to any of the Equality Act's protected characteristics are respected, or at the very least tolerated.
Employers must have anti-discrimination policies and procedures prohibiting all forms of discrimination including that on grounds of sexual orientation and ensure that all employees know that homophobia will not be tolerated.
A sexual orientation discrimination claim can arise even if an employee does not have the sexuality which they are assumed to have (see 'Perceived or associative discrimination' above).
Case law illustrates how the law works in this area.
In 2009, the Court of Appeal confirmed that the use of homophobic language by work colleagues to harass a heterosexual man, because he had gone to a boarding school and lived in Brighton, was contrary to legislation (English v Thomas Sanderson Blinds Ltd, CA, 2009 and EAT, 2011). Although the employee's colleagues knew he was not gay, the bullying or harassment was based upon his sexual orientation (whether real or imagined) and had the effect of violating his dignity and creating a degrading, humiliating or offensive environment for him and was, therefore, unlawful.
Another hearing in the case established the following steps for tribunals to follow when deciding whether there has been sexual orientation harassment. They should:
- explore the claimant's own perceptions and feelings to decide whether the effect of the unwanted conduct was to violate their dignity or create an adverse environment
- decide whether it was reasonable for the claimant to have this feeling or perception.
If the tribunal considers the claimant's response was reasonable in the circumstances, then the conduct complained of will amount to harassment.
In 2011, the Court of Appeal (CA) considered the issues surrounding 'outing' gay employees in the workplace (Grant v HM Land Registry). An employee had come out to other staff at the office where he worked. He subsequently ended up working at another office where a female manager referred to his sexual orientation by making 'limp wrist' gestures towards him. She also said to another female colleague, 'Don't go fluttering your eyelashes at him, he's gay'. He claimed discrimination and harassment.
The CA agreed with the EAT that the employment tribunal should have considered the fact that the employee was ‘out at work’ when he worked in the previous office. By putting their sexuality into the public domain, claimants risk becoming the focus of conversation and gossip. Gossip, provided it is not ill-intentioned, would not in itself be direct discrimination or harassment, even if the claimant was upset by the disclosure. However, even though an employee has ‘come out’, remarks or references to their sexuality can constitute discrimination if those comments are vitriolic or offensive. 'Outing' someone could also be an act of direct discrimination and harassment.
Can a sexual orientation discrimination claim arise if an employer did not intend an employee to hear or see a discriminatory comment?
The fact that an employer (or employee committing the discriminatory act against another employee) did not intend that a discriminatory comment should be seen or heard is not a defence in a discrimination claim.
In one case, an openly gay barrister was reviewing a case file and came across a three-page handwritten note made by one of the partners in the firm in which the barrister and another colleague were discussed. As well as uncomplimentary comments on both men’s work, the note also referred to the barrister’s sexual orientation in a way he found offensive and accused him of passing work to a friend just because he too was gay. When the barrister raised the matter with the employer, the firm investigated and said that the comments were a personal ‘aide-memoire’. The barrister claimed that he had been the victim of sexual orientation discrimination.
The Employment Appeal Tribunal agreed that the law firm had discriminated against the barrister on the basis of his sexual orientation as the handwritten note was, on the face of it, ‘offensive and insulting’ and could constitute a detriment to the employee (Bivonas LLP and others v Bennett, 2012).
How much compensation will a successful sexual orientation discrimination claimant receive?
The potential award is unlimited. The extent of compensation reflects other discrimination awards and depends on the nature of the abuse.
Statistics published by the Employment Tribunals Service for the period April 2019 and March 2020 show that the median award given by an employment tribunal for discrimination claims based on sexual orientation was £27,936. In one case, Allen v Paradigm Precision Burnley Ltd, an engineer was awarded £174,645 by an employment tribunal for the way he was treated after revealing he was gay (see PM News, 8 July 2021, 'The latest on sexual orientation discrimination in the workplace').
An employer’s failure to follow the Acas Code of practice on disciplinary and grievance procedures can lead to an increase in the award of compensation.
There are guidelines, referred to as the Vento bands, for maximum injury to feelings awards in discrimination cases (see 'Personal injury limits' in our Statutory rates and compensation limits).
For general guidance on the approach to the calculation of compensation in a discrimination context, see our Tribunal claims Q&As.
The following cases provide an indication of tribunals' approach to compensation.
In one case, a company director had made a 'limp wrist hand gesture' and said 'hello darling' to the claimant on several occasions. This started as a joke but, over time, began to affect him. The director also made comments to the effect that he 'did not understand why God made homosexual men'.
The tribunal found there was direct discrimination, as the director had not made similar jokes about any other member of staff’s sexuality. Although the hand gesture was humiliating and the detrimental comments insulting, they did not amount to harassment. The claimant agreed that the 'hello darling' comments were intended as a joke and the comments about God and homosexuality were made in the context of a discussion about religion. However, had the claimant complained about this conduct at the time, his harassment claim may have succeeded as well. The tribunal awarded the claimant £2,000 for injury to feelings (Callahan v Benchmark Cleaning Services Ltd, 2013).
In Whitfield v Cleanaway UK Ltd (2005), the claimant was subjected to sustained abuse from senior members of staff and was eventually forced to leave his £54,000 a year job as business manager. He received £35,000 in compensation.
In Ditton v CP Publishing Ltd (2006) a gay sales manager, who quit after only eight days with the company, was awarded over £120,000. He had received persistent homophobic comments from a senior employee, including rhyming slang for 'bent' and 'you wee poof'. There was both direct discrimination and harassment. Medical evidence proved Ditton was psychologically damaged by the experience, which explained his inability to get further employment. In view of the potential earning power of the job (£85,000 p.a.) the tribunal awarded him £10,000 for injury to feelings, £76,937 for financial loss, £5,291 interest and £26,081 extra for failure to follow statutory procedures.
Peter Lewis v HSBC Bank plc (2006) illustrates the uncapped nature of sexual orientation discrimination claims. The former global head of equity trading claimed £5m from HSBC for unfair dismissal and sexual orientation discrimination. He was dismissed from his £1 million a year job when another employee alleged that he had performed a lewd act and looked at him while they were at the bank's gym. The employee did not recover the £5 million, essentially because the decision to dismiss him was found to be based on a reasonable belief that the employee was guilty of the gross misconduct. However, the employer lost significant sums in legal costs defending the claim.
How should an employer deal with prejudice banter or heterosexual machismo in the workplace?
Sexual orientation discrimination tends to occurr in workplaces where a certain atmosphere or culture appears to prevail or be tolerated. Corporate entertaining that involves trips to lap-dancing clubs or excessive out-of-hours drinking sessions could also expose an employer to sexual orientation or sex discrimination claims.
Where such behaviour or activities violate a person's dignity or create an intimidating, hostile, degrading or humiliating work environment, employees may have a claim under the Equality Act 2010. Derogatory comments about an employee's sexual orientation, even if made as a joke, is likely to constitute either harassment or direct discrimination and employers should act to prevent this.
For an employer, merely having policies in place and carrying out investigations will not be enough. It is also necessary to challenge people's attitudes towards homophobia and to educate employees. Evidence of diversity within a workforce will not automatically help an employer to prove that discimination is unlikely to have occurred.
All employers must regularly review, communicate and enforce their employment practices, and their inclusion and diversity policies and procedures to ensure that they do not either directly or indirectly give rise to such claims. Any benefits dependent on marital status should be extended to civil partners.
Although an employer may be able to establish that it took reasonable steps to prevent homophobic harassment by employees, the employer is expected to be very proactive. For example in Martin v Parkam Foods Ltd (2006) an employee who was gay was the subject of graffiti and offensive remarks and was eventually suspended due to the stress this caused him and to enable the organisation to investigate his ongoing complaints. He then resigned and presented a successful tribunal claim for constructive unfair dismissal and direct discrimination and harassment on the grounds of sexual orientation.
Although the employer had anti-discrimination policies and procedures prohibiting discrimination on grounds of sexual orientation and these were communicated to managers, the policies were ineffective in ensuring that the graffiti did not reoccur. Although the employer had been unable to identify the graffiti artists, it should have taken further steps, such as training, team briefings, group meetings, and one-to-ones, so that each employee was left in no doubt that the employer would treat homophobia extremely seriously and that the perpetrators were at risk of dismissal. The notices in the toilets should also have referred to the homophobia. The employer should have apologised to the victim and should not have suspended him while investigating his grievance.
In Moules and Amos v Aquatec Rainsoft Ltd (2009) an employer failed to intervene to prevent two employees (who were a lesbian couple) being humiliated by comments at work. The employer said, 'Don't expect anything to be done about it' and confirmed that the perpetrator would not be sacked. The employer was ordered to pay £5,000 for injury to feelings for sexual orientation discrimination, together with further unfair dismissal damages totalling more than £22,000 compensation.
Is it necessary to require new employees to complete a form specifying their single or partnership status?
Since December 2005, as a result of the Civil Partnerships Act 2004, same-sex couples have been able to obtain legal recognition of their relationship by registering as each other's civil partner. This was followed by the Marriage (Same Sex Couples) Act 2013. The advent of civil partnerships has given rise to some practical administrative problems for employers.
Asking recruits to specify whether they are married or in a civil partnership could constitute direct or indirect discrimination depending on the facts, how the information was used and whether it was sought unnecessarily.
Therefore, it is probably easier to avoid requiring new employees to complete a form specifying whether they are in a civil partnership as this would, in effect, require them to disclose their sexuality at a stage in the employment relationship when they may not wish to do so.
In many cases it will be possible to word policies and forms so that they use the terminology of ’spouse or civil partner’ without having to specify which applies. Alternatively, as a short term solution, existing forms could be amended to read ’wherever ’husband or wife’ is referred to, this includes those who have registered a civil partnership under the Civil Partnerships Act 2004’.
However, information may be needed for legitimate reasons, for example, because the employer:
- is required by law to offer employment benefits such as pension arrangements, private medical insurance etc to partners in a civil partnership in the same way as married partners, or
- has requested the information as a part of equal opportunities monitoring, or
- needs to ascertain next of kin details for use in the case of illness or emergency.
If details are sought for a legitimate reason then the form should explain the reason for the information being sought.
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