The government’s ban on NDAs that silence victims of workplace harassment and discrimination has been widely applauded – but there could be unintended consequences that are mostly to the detriment of whistleblowers and those who have been harassed, writes Eliza Nash
A late amendment to the Employment Rights Bill addresses contractual duties of confidentiality relating to harassment and discrimination. The amendment is a small one, but it has large implications.
Section 202A, which is to be inserted into the Employment Rights Act 1996, will render any provision in an agreement between an employer and a worker void, in so far as it purports to preclude the worker from making allegations of or disclosing information relating to harassment or discrimination.
In other words, confidentiality clauses, or non-disclosure agreements (NDAs), will no longer be enforceable to prevent workers from publicly airing allegations of harassment or discrimination.
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Although this provision applies to all contracts between employer and worker, it will resonate loudest in relation to settlement agreements, through which employers reach a financial settlement of claims brought or alleged by an individual, in return for their agreeing to withdraw proceedings and waive all claims.
In addition, confidentiality clauses preventing the individual from speaking publicly about the matter are standard in such agreements and operate as an additional incentive for the employer to agree an out of court settlement, since there is commercial value to the employer in preserving its reputation, as well as limiting financial exposure. This is the case irrespective of the ultimate truth of the allegations.
As the law stands, the duty of confidentiality in settlement agreements is already subject to a number of exceptions which enable the worker to speak out in certain circumstances. Whistleblowing laws provide that any provision in an agreement is void in so far as it seeks to preclude a worker from making a protected disclosure (which is likely to cover harassment and discrimination ) and from 1 October 2025, section 17 of the Victims and Prisoners Act 2024 provides that NDAs will be unenforceable against victims of crime in relation to disclosures made to certain specified persons, including the police, qualified lawyers or healthcare professionals.
The Solicitors Regulatory Authority (SRA) also imposes strict rules on lawyers to ensure that settlement agreements do not prevent the individual from reporting criminal offences or serious regulatory breaches or from cooperating in criminal investigations.
The risk is that without the benefit of an NDA, settlement will be a less attractive option for employers”
The proposed amendment goes much further than this. Although it will not apply to “excepted agreements”, which satisfy such conditions as may be specified by the secretary of state in regulations, there is as yet no indication of what these conditions might be.
Unlike under the whistleblowing legislation, where disclosures need to be made in public interest and must only be disclosed to certain specified persons in order to be protected, there do not appear to be any restrictions either in respect of the motivation behind making the allegations or to whom they are reported. Subject to a good faith requirement being inserted in the legislation, individuals would in theory be free to post on social media about what they alleged took place or sell their story to the press.
The change to the law has come about in large part as a result of campaigning from Can’t Buy My Silence, the group spearheaded by Zelda Perkins, a former PA to Harvey Weinstein. Seeking to prevent employers from sweeping this sort of behaviour under the carpet is, without doubt, a good thing, especially if this results in them actively tackling discrimination and harassment in the workplace (which is likely to extend beyond the individual claimant concerned) and leads to better working environments for staff and fewer legal claims for employers.
However, it is the unintended consequences of this amendment that are of concern. The risk is that without the benefit of an NDA, settlement will be a less attractive option for employers, especially in cases they consider to be without merit. Most individual claimants are not motivated by a desire to have their day in court or tribunal, they want to feel that the wrong done to them has been recognised and compensated for.
Achieving a financial settlement at an early stage satisfies these objectives – it represents a “victory” for the individual, but one which allows them to move forward with their lives, instead of being tied into costly and extremely stressful litigation. Settlement also reduces the number of claims in an already overburdened tribunal system.
If employers are more reluctant to settle claims, claimants, then facing litigation lasting upwards of two years (and which, given the huge delays in our tribunal system, will only increase), may not have the heart or bank balance to continue. They may ultimately be the losers.
In this scenario, neither side really “wins”, and disputes take longer and cost more money to resolve – certainly not what the new laws hope to achieve.
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