Marianne McJannett

If passed, any confidentiality clauses in settlement agreements or other agreements that seek to prevent a worker speaking about an allegation of harassment or discrimination would be unenforceable, allowing victims to speak freely about their harassment. Deputy PM Angela Rayner said in her statement about this amendment, “Victims and witnesses of harassment and discrimination should never be silenced…the use of NDAs to cover up abuse and harassment is growing – and sadly amongst those in low-income or insecure employment across multiple industries and workplaces. This cannot go on. That is why we are stamping out this practice and taking action to ban any NDAs used for this purpose. My message is clear: no one should suffer in silence and we will back workers and give survivors the voice that they deserve.”

The changes being introduced to the bill, would not affect NDAs for legitimate commercial use, such as commercially sensitive information (for example client details) or intellectual property, but would simply relate to employees who have raised issues of discrimination or harassment. NDAs as part of settlement agreements have become the default for many employers in lieu of addressing misconduct or alleged misconduct in the workplace relating to harassment, sexual harassment or discrimination, which is not their intended purpose.

However arguably this could be seen as the government shooting themselves in the foot by introducing such an amendment – most employers would not want to settle a discrimination allegation without the knowledge and reassurance of there being confidentiality in place. The settlement of employment claims are made without admission of liability and the confidentiality clause benefits an employer in relation to allegations which, of course, it doesn’t want to be raised in public, but also allegations which are falsely made.

There are commercial and reputational benefits to an employer to settle a matter regardless of whether an allegation raised is true, but fewer will look to do so if the employee is able make a public statement about the matter. There are also benefits for an employee in entering into an agreement which stipulates confidentiality, which allows them to move forward from a very difficult satiation. The reality could be that employers will have to wait until a tribunal claim is potentially raised against them and seek to have a matter settled via a COT3 agreement or judicial mediation settlement, before they can have the comfort of confidentiality. Given the additional changes to employment rights including extending the right to bring an unfair dismissal claim from day 1 of employment, alongside the current pressures on the employment tribunals, it could mean that such a resolution is not reached for a long time after the issue has been raised internally.

This is by no means supporting the argument that victims should be silenced; the Me Too movement only having gained traction by individuals being brave enough to “breach” NDAs. However it is important to note that the confidentiality provisions can bring comfort to employees and not just employers.

So what now for businesses? While we await the final confirmation of the changes coming in the Employment Rights Bill, the changes introduced in October 2024 in the Worker Protection Act 2023 should be the real focus. Employers should ultimately want to get to a position where there are no sexual harassment claims requiring the use of settlement agreements. The Worker Protection Act highlights the importance of employers taking a proactive approach in preventing sexual harassment in the workplace, and if steps have not been taken to ensure this is being done, now is the time to address this. Focus on being an employer whose staff know the importance of preventing sexual harassment and enabling people to report concerns if required.

Marianne McJannett is a partner at Aberdein Considine