Ministers are considering a new law specifically for transsexuals, although the Equal Opportunities Commission has recommended that the 22-year-old Sex Discrimination Act should be changed instead.
The tribunal ruled that to prove illegal discrimination, victims must show that they would have been treated differently if they had not had sex changes. In the past, employers were allowed to discriminate against a man who had become a woman so long as they could prove they would have acted in the same way towards a woman who had become a man.
Two cases have confirmed that transsexuals now have legal protection. In the first, a former senior manager in a Cornish college went to the European Court of Justice after being refused promotion and made redundant as a result of becoming a woman. The court ruled last year that she had rights under European law, but its decision did not extend to the full protection of the Sex Discrimination Act and applied only to public sector employees.
In the second case, which ended a month ago, a theme park engineer suffered severe harassment after becoming a woman.
"C", who has been granted a court order preventing her identification, attempted suicide after colleagues put razor blades in her car door, cut her brake cables and held a sweepstake on whether she would die in an accident. She can no longer work because she was partially disabled in an accident which happened after colleagues refused to work with her. The tribunal ruled that she was covered by the Sex Discrimination Act and that she should be compensated. The level of compensation will be decided at a hearing in December.
Although the Sex Discrimination Act has been deemed to cover such cases, officials say that it was clearly not designed to do so and needs amending.
As well as protecting employees, it also covers consumers of goods and services. So, for example, if someone who has had a sex change to become a woman is told to use male changing rooms at a swimming pool, she may have a case against its management. Ministers must decide whether the act should list any exceptions.
Kamlesh Bahl, the chairwoman of the Equal Opportunities Commission, said it now had a legal duty to consider taking cases of discrimination against transsexuals: "We have championed these new rights because of the blatant discrimination that transsexuals suffer. This increases the pressure to change the sex equality laws which were not designed to deal with transsexuals."
Madeleine Rees of Tyndallwoods Solicitors in Birmingham, said "C" had suffered "the most disgusting forms of sexual harassment". Tampons had been left on her chair and her jacket had been defaced with lipstick, she said.
"This is an excellent decision because it extends protection for transsexuals outside the area of employment," Ms Rees said.