The Government has proposed a ban on NDAs (gagging orders) in relation to discrimination and harassment in the workplace has just been announced by. The aim behind the ban is to shine a light on discrimination and harassment, hopefully forcing a cultural shift against it by employer organisations.
Clause 22A of the Employment Rights Bill (if enacted) will render void any provision in an agreement between an employer and employee, such as an employment contract or settlement agreement, that seeks to prohibit the making of allegations or disclosures relating to harassment or discrimination (as defined in the Equality Act 2010).
The planned protection would apply regardless of the type of discrimination (not just sex discrimination) and whether the affected individual is the complainant or another employee.
The new provision would not apply to allegations involving failure by an employer to make reasonable adjustments for a disability – meaning those types of allegations/claims can still be subject to NDAs.
“This new clause added to the Employment Rights Bill represents a fundamental change for employers and employees alike,” says David Greenhalgh, employment partner with Excello Law. “Employers will need to urgently review confidentiality wording in their employment contracts, policies and settlement agreements if the Bill is passed.
“The ban, if enacted, may work counterintuitively, as employers would be discouraged from settling threatened harassment and discrimination claims, given they would no longer be able to require and ensure complete confidentiality (and protection of their reputation) as a condition of a settlement.
“Without also properly funding and reforming the Employment Tribunal system to reduce the current massive delays in cases getting to final hearing and without changing the cost rules to those bringing successful claims to get their legal fees paid by their employers, such a ban would be detrimental in the short term for the victims of discrimination and harassment.”
“This proposed amendment to the Employment Rights Bill is undoubtedly a noble one,” said Stephen Simpson from Brightmine. “The original purpose of non-disclosure agreements (NDAs) – to allow employees whose employment relationship has soured the opportunity to have a clean break from their employer via a contract under which they agree a payment in return for maintaining their confidentiality – has to some extent been corrupted. Critics can legitimately point to high-profile instances in which the misuse – or blanket overuse – of NDAs has allowed perpetrators’ discrimination and harassment to be swept under the carpet and to continue unchecked, sometimes for many years.
However Simpson notes there are legitimate concerns that this change could make employers less inclined to offer financial settlements to a departing employee who has a potential discrimination or harassment claim if they cannot guarantee confidentiality from that individual. “Could this reduce the space for an employer and employee to come to an early settlement that satisfies both parties, potentially leading to costly litigation down the line?” Suggests Simpson. “This will be of particular concern given the significant delays that have already built up in employment tribunal cases being heard.”
Simpson concludes: “While some employees will of course want to speak out publicly about their mistreatment, there will be many others who simply want to put their experiences with a particular employer behind them and depart quietly with the financial cushion of a payout. In practice, this can sometimes be the best available option for the individual, particularly if the employment relationship is already beyond repair and the financial payoff is a healthy one.”
