From the judgement summary:
Interpreting “sex” as certificated sex would cut across the definitions of “man” and “woman” and thus the protected characteristic of sex in an incoherent way. It would create heterogeneous groupings. As a matter of ordinary language, the provisions relating to sex discrimination, and especially those relating to pregnancy and maternity (sections 13(6), 17 and 18), and to protection from risks specifically affecting women (Schedule 22, paragraph 2), can only be interpreted as referring to biological sex (paras 172, 177-188).
Gender reassignment and sex are separate bases for discrimination and inequality. The interpretation favoured by the EHRC and the Scottish Ministers would create two sub-groups within those who share the protected characteristic of gender reassignment, giving trans persons who possess a GRC greater rights than those who do not. Those seeking to perform their obligations under the Act would have no obvious means of distinguishing between the two sub-groups to whom different duties were owed, particularly since they could not ask persons whether they had obtained a GRC (paras 198-203).
That interpretation would also seriously weaken the protections given to those with the protected characteristic of sexual orientation for example by interfering with their ability to have lesbian-only spaces and associations (paras 204-209).
The interpretation of the EA 2010 (ie the biological sex reading), which we conclude is the only correct one, does not cause disadvantage to trans people, with or without a GRC. In the light of case law interpreting the relevant provisions, they would be able to invoke the provisions on direct discrimination and harassment, and indirect discrimination. A certificated sex reading is not required to give them those protections (paras 248-263).
We therefore conclude that the provisions of the EA 2010 which we have discussed are provisions to which section 9(3) of the GRA 2004 applies. The meaning of the terms “sex”, “man” and “woman” in the EA 2010 is biological and not certificated sex. Any other interpretation would render the EA 2010 incoherent and impracticable to operate (para 264).
A person with a GRC in the female gender does not come within the definition of “woman” for the purposes of sex discrimination in section 11 of the EA 2010. That in turn means that the definition of “woman” in section 2 of the 2018 Act, which Scottish Ministers accept must bear the same meaning as the term “woman” in section 11 and section 212 of the EA 2010, is limited to biological women and does not include trans women with a GRC.