If you’ve seen headlines about the EHRC’s draft updated Code of Practice, you might be wondering whether this is something that needs immediate action or another piece of guidance that can go in the “read later” pile.
The honest answer is: somewhere in between. This isn’t a radical overhaul of equality law, but it does tighten up expectations around how businesses apply the Equality Act 2010 in practice. And for SMEs where HR decisions are often made quickly, by a handful of people, without a dedicated legal team that matters.
The bigger risk for smaller businesses isn’t getting the law wrong in theory. It’s making inconsistent decisions that can’t be explained if they’re ever challenged.
What’s changing?
The draft Code brings together legal and case law developments since the original version was published in 2011, including the Supreme Court’s ruling that “sex” in the Equality Act 2010 refers to biological sex. The main proposed areas of change are:
How “sex” is defined in certain legal contexts, following recent Supreme Court interpretation
Updated guidance on single-sex and mixed-sex services and facilities
Expanded coverage of disability with much greater emphasis on hidden, fluctuating and neurodiverse conditions
Age discrimination guidance, previously issued separately, now incorporated into the main Code
Reinforced protections for individuals with the protected characteristic of gender reassignment
For most SMEs, none of this will feel entirely new. But even as a draft, the Code signals a more explicit standard for how decisions should be made and evidenced and that direction is unlikely to change when it comes into force.
What does this mean for your business day-to-day?
1. Your equality policies may need a refresh
Many SMEs haven’t revisited their equality, diversity, recruitment, or conduct policies since they were first drafted. If yours were written several years ago, now is a good time to check whether the language and definitions still reflect current guidance particularly around disability, sex, and gender reassignment.
You don’t need to start from scratch. In most cases, targeted updates to specific sections will be enough.
2. Single-sex facilities and services
If your business operates any single-sex spaces: changing rooms, toilets, or services, the draft Code proposes clearer guidance on when this is lawful and proportionate. The key requirement is that any decision in this area must be clearly reasoned and documented. Ad hoc or undocumented approaches carry real risk.
3. Disability and reasonable adjustments
This is arguably the most important area for SMEs to focus on. The draft Code places significantly greater emphasis on hidden conditions, fluctuating health issues, and neurodiversity, conditions that are often misunderstood or underestimated in smaller workplaces.
In practice, this means not taking a narrow view of what “counts” as a disability. If an employee discloses a condition whether that’s anxiety, ADHD, long Covid, or anything else that has a substantial and long-term effect on their day-to-day life, the duty to consider reasonable adjustments applies. Getting this wrong is one of the most common sources of employment tribunal claims we see.
4. Recruitment and HR decision-making
Language matters more than many employers realise. Updated guidance now refers to “sex” rather than “gender” in certain reporting and HR contexts. If you’re involved in gender pay gap reporting or have structured HR processes, it’s worth ensuring your terminology is consistent and up to date.
The documentation question
One theme that runs through the updated Code is documentation. This doesn’t mean creating mountains of paperwork but it does mean having enough of a record to explain how and why key decisions were made.
For SMEs, where decisions are often made informally and quickly, this is the area where risk most commonly creeps in. A decision that seems entirely reasonable at the time can become very difficult to defend if there’s no record of the reasoning behind it.
A simple note of why a decision was made, recorded at the time, is often all that’s needed. It’s not bureaucracy, it’s protection.
What should you be doing now?
We’d suggest starting with three straightforward steps:
Review your core HR and equality policies, check that the language reflects current guidance, particularly around disability and sex/gender definitions
Think about how those policies are applied in practice not just whether they exist on paper, but whether managers are aware of them and applying them consistently
Check your recruitment and reporting processes for any terminology that may need updating
Beyond that, the single most valuable thing most SMEs can do is establish a basic habit of documenting decisions in sensitive or higher-risk areas. It doesn’t need to be formal, a brief note on file is usually sufficient.
Need support with this?
At HR Hub Plus, we work with SMEs every day on exactly these kinds of practical HR challenges, translating legal updates into clear, workable policies and processes that fit how your business actually operates.
If you’re unsure whether your current policies and practices will be aligned with the incoming EHRC guidance once it comes into force, we’re happy to take a look.
