The government plans to ban employers using controversial non-disclosure agreements (NDAs) to silence victims of workplace harassment. However, experts warn it could have unintended consequences.
The ban is included in an amendment to the Employment Rights Bill that was tabled this week. It means employees who have suffered workplace harassment will be able to speak out about their experience.
Changes to the bill dovetail with the Worker Protection Act that came into force in 2024. The act requires employers to take reasonable steps to prevent sexual harassment and improve response procedures.
In addition to enabling people that have suffered harassment, including sexual harassment or discrimination in the workplace, to speak out, the bill amendment means witnesses to harassment can call it out and publicly support victims without the threat of being sued.
Deputy Prime Minister Angela Rayner said: “We have heard the calls from victims of harassment and discrimination to end the misuse of NDAs.
“It is time we stamped this practice out – and this government is taking action to make that happen.
“The Employment Rights Bill will ban any NDA used for this purpose, so that no one is forced to suffer in silence.”
Harassment widespread
The proposed ban has come as a recent survey found that sexual harassment remains widespread and underreported in UK workplaces.
The Unite the Union survey of more than 23,000 workers found that 60 percent of women have experienced sexual harassment during their working lives. In Scotland, nearly 40 percent of women said they had been harassed.
The report said that most of those affected did not report what happened because they thought they would not be believed or that they would be subject to retaliation.
In addition, many survey respondents were unsure about how or where to report such harassment at work.
Ruth Sparkes, co-founder of reporting platform SaferSpace, said Unite’s survey results were sadly unsurprising.
“This confirms what many of us already knew. The reality for a huge number of workers, especially women and young people, is that they experience harassment and don’t report it. Sometimes it’s fear. Sometimes it’s uncertainty. Often it’s because they’ve seen what happens when others try to speak up,” she said.
Sparkes said the death of soldier Jaysley Beck in 2021 after sustained harassment by a senior officer had stayed with her throughout the project. She described Beck’s case as “a tragic example of what happens when systems fail the people they are supposed to protect”.
A block on settlement agreements?
However, employment law experts warned the NDA ban could have unintended consequences.
Bethan Jones, employment law partner at law firm Spencer West, said: “This is a significant change to the enforceability of confidentiality provisions, which up until now have been widely used, particularly in settlement agreements.
“Whilst the change is clearly aimed at ensuring transparency in the workplace, it may have unintended consequences which will negatively impact both employers and employees. Employers may be disincentivised from settling claims which they think they can defend, since they will no longer benefit commercially from settling a claim which may not be well-founded, if they cannot also benefit from some reputational protection. This could result in employees having to commit to litigation in difficult circumstances, when they may otherwise have received a settlement, allowing them to move on more quickly and have a clean break.”
Jones said that employees have always had the option to go to a tribunal and share their case publicly if they want to, but many genuine victims of harassment would rather choose to preserve their anonymity. This change will remove that choice, she said.
Stephen Simpson, content manager at Brightmine, said: “This proposed amendment to the Employment Rights Bill is undoubtedly a noble one. The original purpose of 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, 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? This will be of particular concern given the significant delays that have already built up in employment tribunal cases being heard.
“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.”
Poor culture and management
The CIPD welcomed the government’s focus on preventing misuse of NDAs but said that the law alone will not end workplace harassment.
Ben Willmott, head of public policy for the CIPD, said: “For too long, a minority of companies have been able to use NDAs to prevent employees from speaking out about harassment or discrimination at work. NDAs should never be used to push unfair treatment of any kind under the carpet. Introducing stricter conditions for the use of NDAs could be a positive step towards creating greater accountability in organisations whilst protecting an individual’s right to sign an NDA if they so wish.
“NDAs can be useful for both employers and employees in certain circumstances, but it’s vital to ensure that they are used legally and ethically. For instance, in some instances, it may be to an individual’s advantage and preference to have an NDA so they can reach a settlement quickly and confidentially and have some closure.
“For this reason, it’s important the amendment bringing in this change also enables employees to choose to have an NDA in circumstances where they believe it is in their interests. There is also the need for improvements to the labour market enforcement system as part of wider measures to address discrimination and harassment at work.
“Changes to the law alone though will not prevent poor work cultures or address poor people management practices which are often the underlying causes of sexual harassment or discrimination. While we welcome this development, we would also urge employers to tackle the root causes of such issues so all employees can feel safe and protected at work. People professionals have an important role to play in ensuring the ethical use of NDAs. This means influencing the organisation’s leadership to have oversight of their use. Importantly, organisations should have the correct channels in place for staff to raise concerns they have about inappropriate workplace behaviour so these can be addressed at an early stage.”
The Employment Rights Bill is due to return to the House of Lords next week.
