In a similar case to the one mentioned I believe it to be appropriate to
record the employee / student data as the new gender in order to comply
with the principle of accuracy. Not recording the new gender may be
considered a breach of Human Rights. Legally the persons birth certificate
would not be changed to record the new gender but for all intents and
purposes in every day life they would not produce their birth certificate
and would be recognised in their new identity.
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