Confidentiality Clauses - What Does Government Propose?
Following the Government's consultation on the misuse of confidentiality clauses, we outline the proposed reforms to ensure victims of harassment are not silenced.
The Government's consultation on misuse of confidentiality clauses in situations of workplace harassment or discrimination closed on 29 April and the Government published its response on 21 July. Its view is that although there is a legitimate place for confidentiality clauses in employment contracts and settlement agreements, reforms are needed to ensure that these clauses do not silence or intimidate victims of harassment and discrimination.
Proposals for Reform
The Government intends to introduce legislation to ensure that confidentiality clauses cannot be used to prevent an individual making disclosures to the police, to regulated health and care professionals or to legal professionals.
The Government also intends to introduce legislation to ensure that the limitations of a confidentiality clause are clear to anyone signing one. In the case of employment contracts, the mandatory written statement of particulars of employment will be required to clearly set this out. In the case of settlement agreements, the independent legal advice which must be obtained by any individual signing a settlement agreement will be required to include specific advice on the limitations of any confidentiality clause.
However, the Government has decided that it will not introduce any standard wording for confidentiality clauses. The conclusion was that this would be too restrictive and require too frequent updating. Instead the Government intends to work with relevant stakeholders to produce drafting guidance.
Best Practice
Employers should be reviewing confidentiality clauses in employment contracts and settlement agreements to ensure that they are clear in scope, particularly where the employer operates in a regulated environment.