As the Employment Rights Bill nears the end of its passage through Parliament, a significant government-backed amendment proposes to restrict the use of confidentiality clauses (commonly known as NDAs) in cases involving harassment or discrimination. B P Collins’ employment team explores in more detail.
What’s covered?
The proposed change would make void any term in an agreement – whether an employment contract or a settlement agreement – that seeks to prevent a worker from making an “allegation” or “disclosure of information” about:
- Harassment or discrimination (as defined under the Equality Act 2010); or
- The employer’s response to that harassment or discrimination, or to the raising of concerns about it.
This could include settlement negotiations or the existence of a settlement agreement – effectively making confidentiality clauses unenforceable in many cases involving protected allegations.
If you need advice on how this proposed change may affect your company and practices, please do get in touch with our experienced employment team at enquiries@bpcollins.co.uk or call 01753 889995.
Who is protected?
The clause applies to workers (a broader category than employees) and may be extended to include interns, trainees and others working under specified contracts. It covers victims or alleged victims of harassment or discrimination as well as workers who are witnesses to such behaviour.
Implications for employers
The changes present significant challenges for employers who have traditionally relied on comprehensive NDAs in settlement agreements.
Employers may be reluctant to settle employment disputes involving harassment or discrimination allegations if they cannot rely on confidentiality provisions – even if a worker wishes to settle and is prepared to agree to confidentiality terms.
This could lead to more litigation if employers opt to defend claims (to safeguard their reputation) rather than settle without confidentiality protection.
When will it come into force?
It is not yet clear whether the proposed amendment, if passed, will take effect immediately or be phased in later. Based on the Government’s roadmap, it will be 2027 at the latest.
What should employers do now?
- Consider how to approach confidential settlements in light of the proposed change. Contract and settlement agreement templates may require substantial revision.
- Stay alert for further guidance and implementation updates.
- Ensure HR and legal teams understand the new restrictions.
For tailored advice on how this proposed change or any other proposals in the Employment Rights Bill that may affect your organisation’s practices, please contact B P Collins’ employment lawyers at enquiries@bpcollins.co.uk or call 01753 889995.
