A significant recent amendment to the Employment Rights Bill will, if passed, prohibit employers from using Non-Disclosure Agreements (NDAs), also known as confidentiality clauses, to restrict employees from discussing an experience of harassment or discrimination in the workplace.
What are the proposed reforms?
Under the proposals, any confidentiality clause such as an employment contract or settlement agreement that aims to prevent a worker from disclosing or alleging workplace harassment or discrimination, will be void. Clauses which seek to silence the employer’s response to such incidents and/or the fact that an allegation was made are also covered by the proposed ban.
Changes will apply to both victims and witnesses of workplace harassment or discrimination. Proposals will protect current and former employees and may extend through secondary legislation to cover contractors, trainees, and individuals on work experience.
It is important to note, only the section of the NDA that aims to stop someone from reporting harassment or discrimination will no longer be valid and. other legitimate confidentiality provisions, such as those protecting trade secrets or sensitive information, will remain enforceable.
What hasn’t been included?
The ban isn’t absolute. Under the proposals, certain exceptions to the ban on NDAs will apply. For example, ‘excepted agreements’ are due to fall out with the scope of the proposals. Furthermore, a government press release suggests that standard settlement agreements, commonly used to terminate employment or resolve disputes, will not be ‘excepted’ and will therefore be subject to the new NDA restrictions. However, the position regarding COT3 agreements, which are used to settle employment disputes through The Advisory, Conciliation and Arbitration Service (ACAS), has not yet been confirmed.
The Department for Business and Trade’s impact assessment suggests that agreements initiated by the employee are likely to be ’excepted’, provided they meet conditions that are to be set out in secondary legislation to follow. Notably, the proposals expressly only cover harassment or discrimination by the employer or a fellow worker. This limitation seems to mean that the NDA ban does not cover the new right to make a claim relating to harassment by third parties, which is already included within the Bill.
When will the amendment take place?
The commencement date for the proposals (if passed) remains uncertain, although indications suggest they may not come into effect until late 2026 or early 2027.
Impact of the proposals in practice
For some time, there has been a perception that NDAs are misused as a way to “hush up” serious allegations of harassment and discrimination, with the #MeToo movement having drawn particular attention to the issue. These proposals have the potential to pave the way for meaningful change for individuals in the workplace. For employers, the focus will have to shift from containment to prevention, which can only be a good thing in terms of internal governance, culture, and employee relations. By fostering openness and accountability, businesses can build trust with employees and enhance their long-term reputation. A workplace that prioritises transparency is more likely to attract and retain employees, and create a safe environment where concerns are addressed effectively. The proposals may, however, also result in employers being less likely or willing to enter into settlement agreements, and this could result in more grievances, complaints and claims as a result. We would encourage employers to ensure that their HR teams keep abreast of developments in this area in order that internal reporting processes and document templates can be updated in due course, if required.
If you would like to discuss the Employment Rights Bill further, please get in touch with a member of our Employment Law team.
