Hands up who has had enough of hearing about the Employment Rights Act 2025? 

We thought as much, so this month it is time for something a little different…well, sort of…

A consultation has just been launched by the Government into the use of Non-Disclosure Agreements (NDA) in cases of workplace harassment and discrimination.  Full disclosure: this is as a result of section 202A of the Employment Rights Act 1996 (ERA 1996), but this is something of which employers should be aware, and it is worth getting involved in the consultation to ensure that the employer view is heard.

What does this mean?

Under the new s.202A ERA 1996:

Any provision in an agreement between an employer and a worker of the employer (whether a worker’s contract or not) is void in so far as it purports to preclude the worker from making:

1. an allegation of, or a disclosure of information relating to, relevant harassment or discrimination, or
2. an allegation, or a disclosure of information, relating to the response of an employer of the worker to
   1. relevant harassment or discrimination, or
   1. the making of an allegation or disclosure within paragraph (i).

This means that it will no longer be possible to impose confidentiality obligations on workers regarding allegations of discrimination or harassment, or their employers’ response to those allegations.

Implications

This could have significant implications for employers – and employees – when seeking to negotiate a settlement of potential discrimination claims.  In such circumstances, it is almost always the case that the employer will want an express confidentiality agreement preventing the employee from disclosing any information relating to the dispute which is being settled.  Indeed, it is often one of the main driving factors for the employer in agreeing to settle a claim, in an attempt to protect their (and potentially their staff) reputation. 

If it will no longer be possible to include such a provision, will that mean that employers are less likely to be willing to settle?  Is that actually good for the employees, who may well then face the choice between lengthy and potentially traumatic legal proceedings in order to obtain any compensation for the alleged discriminatory treatment, or simply walking away?

But what if we agree?

Thankfully, this is not set to be a ‘hard and fast’ rule.  It is proposed that the ban on NDAs will not apply to ‘excepted agreements’ which meet the ‘relevant requirements’, to be set out in secondary legislation.  That means that provided relevant confidentiality agreements meets with those requirements, employers will be able to rely on them, notwithstanding s202A.

Consultation

The current consultation aims to determine what those ‘relevant requirements’ will be.  A number of safeguards are suggested, including:

1. Written independent advice on the terms, effects and legal limitations of the relevant confidentiality obligations;
2. Worker to confirm in writing that they want to enter into the agreement, following the written advice
3. Inclusion of a ‘cooling off’ period of 14 days, during which the worker can withdraw from the agreement
4. Written copy of the agreement to be provided to all parties
5. The confidentiality obligations could be time-limited, rather than ongoing
6. There should be a list of permitted disclosures to whom the NDA would not apply, including regulators, immediate family, law enforcement bodies, regulated professions including legal and tax advisors and support services including counsellors.

There are already some restrictions on confidentiality agreements, but this is set to be a significant change which could have wide-reaching implications, as set out above.  We would therefore encourage that employers get involved in the consultation process to ensure that their first-hand views are taken into account.  The consultation documents can be found here.

In the meantime, if anyone does need any assistance with settling or defending employment claims, whether for discrimination or harassment or otherwise, the team at Tyr have significant experience in dealing with such claims and are always happy to help.