Government outlines its proposals for reforms to confidentiality clauses (NDAs)

The spotlight is continuing to shine brightly on the issue of sexual harassment in the workplace, and employers need to be alive to the government’s proposals for reform which, after a fairly slow start, are now coming thick and fast. The trend towards increasing protection for employees is moving ever upwards, and employers need to ensure they keep pace with the developments, particularly given the potentially criminal implications relating to sexual harassment offences, and the impact on entering into future settlement agreements.

Earlier this month (as outlined in a previous Be Aware alert), the Government Equalities Office launched a consultation on tackling sexual harassment in the workplace; this has now been swiftly followed by the government’s response today to its earlier consultation on Measures to prevent the misuse of confidentiality clauses in situations of workplace harassment or discrimination.

Based on 582 responses and 6 roundtable discussions with stakeholders, while acknowledging that “confidentiality clauses have a legitimate place in the employment context and are not misused in all scenarios”,  the government states it cannot tolerate the use of these clauses to silence and intimidate victims of harassment and discrimination.

The government therefore confirms it will:

  • Legislate to ensure that a confidentiality clause cannot prevent an individual disclosing to the police, regulated health and care professionals or legal professionals. Disclosure permissions will not be extended, however, to unregulated therapists and counsellors on the basis that they may not always be bound by duties of confidentiality in the same way;
  • Legislate so that the limitations of a confidentiality clause are clear to those signing them. This means that the clause must be clear and specific and, for example, not give the impression that the employee cannot disclose information to the police about harassment, discrimination or other crimes. The legislation will apply both to confidentiality clauses which form part of a settlement agreement and those which are entered into at the beginning of an employment relationship  (here, the limitations will have to be included as part of the written statement of employment particulars). The government does not specifically address whether or not it will introduce a specific form of words to be used when drafting a confidentiality clause (with respondents to the consultation almost equally split on this).  Instead it says that it agrees in principle with the Women and Equality Committee’s recommendation to legislate on drafting requirements and that it will do so to make sure that wording is clear and specific.  Further details on this may come to light soon as the government indicates it will respond fully in due course to all its recommendations;
  • Legislate to improve independent legal advice available to an individual when signing a settlement agreement. This will require legal advice to be given not only on the nature of the confidentiality requirement but also on the limitations of confidentiality clauses;
  • Provide guidance on drafting requirements for confidentiality clauses;
  • Introduce new enforcement measures for confidentiality clauses that do not comply with legal requirements. No details have yet been provided on what this means for confidentiality clauses in settlement agreements (the government had originally proposed that any confidentiality clauses which do not follow the new legislative requirements will be void in their entirety); however, for confidentiality clauses in written statements which do not meet the new drafting requirements, additional compensation will be available to individuals in certain circumstances when they bring an employment tribunal claim and it is found that the requirements have not been met in their written particulars of employment. This will not apply retrospectively, however.

Finally, the government confirms that it does not intend to require employers to collect data and report annually on the number of confidentiality clauses used, saying that this type of information is not in itself very meaningful.  Instead, it says that efforts should focus on preventing sexual harassment and discrimination issues in the first instance.

There is, as yet, no firm timescale for implementation of these measures; the consultation response simply says the Government will legislate, “when Parliamentary time allows”.

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