Updated for 2026: Building a Diverse, Equitable, and Inclusive (DEI) Workplace in the UK

Last reviewed: 8 June 2026.

Key Points:

● The Equality Act 2010 protects nine characteristics (age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation) and places obligations on all UK employers regardless of size.

● Since 26 October 2024, all employers have been subject to a new preventative duty under the Worker Protection (Amendment of Equality Act 2010) Act 2023 to take reasonable steps to prevent sexual harassment before any incident occurs, including harassment by third parties such as clients and customers.

● Pay gaps persist across multiple groups: the gender pay gap stood at 12.8% across all employees in April 2025 according to ONS data, while the disability employment gap remained at approximately 30 percentage points in Q2 2025.

● The Financial Conduct Authority's proposals to require diversity data reporting from listed firms were withdrawn in March 2025; diversity disclosure for regulated firms remains voluntary.

● The Employment Rights Act 2025 (Royal Assent 18th December 2025) will later raise the sexual harassment standard from "reasonable steps" to "all reasonable steps", anticipated to take effect in 2026 or 2027.

The Equality Act 2010 sets out nine protected characteristics and prohibits discrimination, harassment, and victimisation in every stage of employment, from recruitment through to dismissal. Employers across all sectors face growing legal risk if they treat DEI as a peripheral matter.

The business case is well established. A CIPD survey of over 2,000 employers, published in its May 2025 report Resetting EDI and reaffirming inclusion, found that only 2% of organisations reduced their DEI focus in the preceding two years, while 34% increased their efforts. Yet only 48% of employers had any DEI strategy or action plan in place at the time of the most recent measurement. That gap between stated commitment and structural delivery is where legal risk concentrates.

The Legal Framework for DEI

The starting point is the Equality Act 2010, which consolidates and extends earlier discrimination legislation. Under section 4, the nine protected characteristics are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. The Act prohibits direct discrimination, indirect discrimination, harassment, and victimisation in relation to those characteristics throughout the employment relationship.

A concept alongside the formal protected characteristics is intersectionality: the recognition that individuals may face compounding disadvantage where two or more characteristics interact. UK data illustrates this clearly. The disability employment gap stood at approximately 30 percentage points in Q2 2025, with employment rates of 52.8% for disabled people against 82.5% for non-disabled people, according to the Government's employment of disabled people 2025 statistics. That gap widens further for disabled people from ethnic minority backgrounds and for older age groups.

The gender pay gap, measured across all employees, was 12.8% in April 2025, according to the ONS Gender Pay Gap in the UK: 2025, down slightly from 13.1% in 2024. Among full-time employees alone, the gap narrowed to 6.9%. The persistence of a larger gap across all employees reflects the disproportionate concentration of women in part-time roles.

One area of ongoing legal development concerns the interaction between protected characteristics. Tribunal decisions since 2021 confirmed that philosophical beliefs, including gender-critical beliefs, are protected under the Equality Act's religion or belief provisions. In Higgs v Farmor's School [2025] EWCA Civ 109, the Court of Appeal held that dismissal for expressing a protected belief is unlawful direct discrimination unless the manner of expression is objectively inappropriate and the employer's response is proportionate. Permission to appeal to the Supreme Court was refused in June 2025. Employers must balance the rights of employees with different protected characteristics with care, ensuring that any disciplinary action is documented, proportionate, and objectively justifiable.

The New Duty to Prevent Sexual Harassment

One of the most significant recent changes to employment law came into force on 26 October 2024. The Worker Protection (Amendment of Equality Act 2010) Act 2023 introduced a positive, anticipatory duty on all employers to take reasonable steps to prevent sexual harassment of their workers in the course of employment. The duty applies to employers of every size and across every sector; no employer is exempt.

The duty is anticipatory: employers must not wait for an incident to occur before taking action. They must assess the risks of sexual harassment arising in their working environment, decide what steps would be reasonable to take to reduce those risks, implement those steps, and keep them under regular review. What counts as reasonable varies according to the employer's size and resources, the nature of the work, and the degree of contact with third parties.

The duty extends to harassment by third parties such as clients, customers, and contractors, as the Equality and Human Rights Commission's updated technical guidance (published 26 September 2024) confirms. Employers must therefore assess risks not only in the office but at client sites, on training courses, and at work-related social events.

Where an employer breaches the preventative duty, and an employee brings a successful sexual harassment claim, the Employment Tribunal may increase the compensation awarded by up to 25%. There is no cap on sexual harassment compensation, so that this uplift can be material. The EHRC may also enforce the duty directly, investigating employers, issuing unlawful act notices, entering into binding agreements, or applying for an injunction, without waiting for a complaint to be made.

Consider this scenario: a client-facing team at a Solihull professional services firm regularly attends client events that involve alcohol. If the employer has carried out no sexual harassment risk assessment, has no anti-harassment policy addressing third-party risk, and has provided no relevant training, it will struggle to demonstrate compliance with the preventative duty. A harassment incident at such an event, followed by a successful tribunal claim, could result in compensation increased by up to a quarter.

Looking ahead, the Employment Rights Act 2025 will raise the standard from "reasonable steps" to "all reasonable steps" when its provisions on sexual harassment come into force, anticipated in 2026 or 2027. Employers should treat current compliance as a baseline rather than a final destination.

Practical Steps for Employers

Knowing the legal framework is one thing; embedding it in practice is another. The following steps represent a grounded approach for employers at any scale.

Start with data. Employers cannot identify where inequality concentrates unless they collect and analyse workforce data, monitoring recruitment outcomes, pay levels, and promotion rates across the protected characteristics. Gender pay gap reporting is mandatory for employers with 250 or more staff. In the financial services sector, the FCA withdrew its proposed mandatory diversity reporting in March 2025 following consultation feedback; disclosure for regulated firms is now voluntary.

Review recruitment practices for indirect discrimination. Job advertisements that impose requirements not actually necessary for the role, or that use language associated with particular demographic groups, may create Equality Act liability. Removing unnecessary requirements, using structured interviews, and providing accessible application processes reduce legal exposure while widening the talent pool.

For employers advising on employment law obligations to workers, ensuring that anti-discrimination and anti-harassment policies are properly communicated, updated, and applied is essential. A policy that exists only on paper will not provide a meaningful defence in tribunal proceedings.

Pay particular attention to disability and neurodiversity. The Equality Act 2010 requires employers to make reasonable adjustments for disabled employees and job applicants. These can include flexible working, assistive technology, accessible interview formats, and adjustments to physical workspaces. The Access to Work scheme provides funding to support some of these adjustments. With the disability employment gap remaining at approximately 30 percentage points and no sign of rapid improvement, employers who invest in accessibility both avoid legal risk and access a wider pool of workers.

Address the position of women in the workforce with targeted policies. Inadequate support around maternity, return-to-work arrangements, and flexible working can increase the risk of discrimination claims and constructive dismissal. Employers who need guidance on structuring those arrangements for working parents can find specific information on maternity and paternity rights in the workplace.

Governance matters. A designated DEI lead maintains accountability and ensures that policies are reviewed and applied. Without a named individual holding responsibility, commitments drift. Senior leaders must model the behaviours they expect and treat DEI as a business priority rather than a compliance exercise.

Employees who believe they have experienced discrimination at work should seek advice promptly, as the three-month time limit for bringing most Equality Act claims in the Employment Tribunal applies.

Frequently Asked Questions

What are the nine protected characteristics under the Equality Act 2010?

The Equality Act 2010 lists nine protected characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. Employers must not directly or indirectly discriminate against, harass, or victimise employees or job applicants on the basis of any of these characteristics.

What does the sexual harassment preventative duty require?

Under the Worker Protection (Amendment of Equality Act 2010) Act 2023, in force since 26 October 2024, employers of all sizes must take reasonable steps to prevent sexual harassment before any incident occurs. That means conducting a risk assessment, implementing an anti-harassment policy, providing regular training, establishing clear reporting channels, and periodically reviewing these measures. The duty extends to harassment by third parties such as clients and customers.

Does the FCA still require diversity reporting from listed companies?

No. The FCA announced in March 2025 that it was withdrawing its proposed mandatory diversity and inclusion reporting requirements for regulated firms, citing the broad range of consultation feedback, expected legislative developments, and the desire to avoid additional regulatory burden. Diversity data collection and target-setting for listed companies and other FCA-regulated entities is currently voluntary.

What is intersectionality, and why does it matter?

Intersectionality describes how overlapping aspects of a person's identity, such as race, sex, and disability, can interact to produce distinct forms of disadvantage. It matters because an employer who addresses gender and race in isolation may still fail to identify or support employees who face barriers at their intersection. Understanding intersectionality helps employers design targeted support and avoid indirect discrimination claims arising from policies that appear neutral on their face.

What should an employer do if it has no DEI policy?

An employer without a DEI policy should begin by auditing workforce data to identify any representation or pay gaps, then draft a policy covering anti-discrimination and anti-harassment (specifically including the sexual harassment prevention duty), reasonable adjustments for disabled workers, and equal opportunities in recruitment and progression. The policy should be communicated to all staff and reviewed regularly. Employers who need guidance on their legal obligations should seek advice from an employment law solicitor before finalising their approach.

About the Author

Nicholas Thomas is Managing Director and Head of the Family and Litigation Department at Pearcelegal. A qualified solicitor regulated by the Solicitors Regulation Authority (SRA No. 393725), Nicholas brings over two decades of legal experience to his clients, covering family law, employment disputes, and civil litigation.

Nicholas read Law at the University of Liverpool, graduating with an LLB in 2004, having previously attended Bishop Vesey's Grammar School in Sutton Coldfield. He began his legal career as an Assistant Solicitor at Bell Lax Solicitors, where he developed a strong foundation in litigation from 2005 to 2009. He joined Pearcelegal in April 2009 as a Litigation Solicitor, was appointed Director in July 2011, and became Managing Director in April 2021.