Why does the Government want to change the rules on NDAs?

While non-disclosure agreements (NDAs) continue to serve legitimate purposes, such as protecting commercially sensitive information or the terms of a financial settlement, their use in the context of workplace harassment and discrimination has drawn increasing scrutiny.

Campaigners have long called for tighter regulation of NDAs in this area. Although the Employment Rights Bill already included measures to treat disclosures about sexual harassment as protected under whistleblowing law, concerns remained about the broader use of NDAs to deter individuals from raising or discussing workplace concerns.

In response, and reflecting cross-party pressure, the Government has now tabled amendments aimed at further limiting the use of NDAs in this context. As government-backed provisions, they are likely to pass into law.

It is worth noting that some aspects of the proposed framework, such as which exceptions will apply and how widely protections may be extended, are still to be confirmed and are expected to be set out in secondary legislation. Employers should keep a close watch on developments as further detail emerges.

What are the Government's proposed amendments?

The proposed changes would make it unlawful to include a clause in any workplace agreement that seeks to prevent a worker from disclosing information about any form of harassment or discrimination - not just sexual harassment.

This includes not only the conduct itself, but also the employer’s handling of any complaint or concern raised.

The measures would apply to any agreement between the employer and the worker, including employment contracts and settlement agreements.

Although the legislation permits future regulations to create limited exceptions (referred to as “excepted agreements”), none have been confirmed to date. However, the Government has indicated that exceptions may be made where the agreement is initiated at the worker’s request, such as where an employee asks to enter into a settlement agreement.

The reforms are intended to apply where the alleged conduct was carried out by the employer or another member of staff, and where the worker either experienced the treatment themselves or is speaking about what happened to someone else in the workplace.

The Government has confirmed it intends to consult with employers and other stakeholders before exercising the power to create excepted agreements, acknowledging the novelty of the provisions and the need to get the balance right. The stated aim is to ensure that conditions for such agreements protect workers from misuse while allowing flexibility for individuals to choose arrangements that suit their needs.

Notably, the Government has recognised that the framework may need to evolve over time to close any loopholes or address unintended consequences - offering scope for adjustments that protect all parties, including against vexatious use of confidentiality or disclosure.

Importantly, the current draft does not extend to all forms of unlawful treatment. For example, it does not cover claims concerning a failure to make reasonable adjustments for disabled workers, or allegations of victimisation. It remains to be seen why these claims are not covered and whether these exclusions will remain in the final version of the legislation.

How do the new NDA provisions differ from whistleblowing protections?

The original Bill introduced protections for workers making disclosures about sexual harassment, by classing these as protected disclosures under the whistleblowing framework. While that was a step forward for worker protection, the protection was limited in scope and relied on the individual meeting the statutory tests for whistleblowing protection.

Those tests require the disclosure to relate to one or more specific category of wrongdoing, to be of information rather than mere allegations, and to be made in the public interest. They can be difficult to apply in practice and are often the subject of legal dispute about whether whistleblowing protection applies at all.

The new NDA provisions take a more direct approach. They apply to a broader range of workplace concerns, covering all forms of harassment and discrimination, and operate outside the whistleblowing framework. In practice, this means individuals would no longer need to meet the whistleblowing tests to benefit from protection. Any attempt to restrict what can be said, in any forum, about such matters through a confidentiality clause would be unenforceable.

The potential reach is also wider in terms of who is protected. While the whistleblowing regime applies only to workers (albeit under an extended definition), the new NDA provisions may apply more broadly. The Bill allows for future regulations to extend protection to independent contractors, individuals on training schemes or work experience, and others engaged under a relevant contract. In practical terms, this means employers may need to review their approach to confidentiality across a broader range of working relationships, not just employees.

These provisions do not replace the whistleblowing regime, which will continue to be important where disclosures are made in the public interest. However, they are likely to make it easier for individuals to speak about their own experience, or their employer’s handling of it, without being constrained by contractual confidentiality provisions.

What does this mean for employers?

If passed, the new provisions will render many existing confidentiality clauses unenforceable - including those commonly used in settlement agreements.

The new provisions will mean employers must not:

use settlement agreement confidentiality clauses to prevent a worker from disclosing an allegation of discrimination or harassment, even after a financial settlement is reached
restrict disclosures about the employer’s handling of a complaint, including any perceived failings in how it was investigated or resolved
prevent witnesses from speaking out about what they observed or how the employer responded
rely on broad non-disparagement or reputational protection clauses that have the effect of silencing disclosures of harassment or discrimination

The Government’s explanatory note and press release confirm that the measures are designed to allow individuals to speak openly about their experiences and the employer’s response.

Until further detail emerges, employers should proceed on the basis that clauses attempting to prevent such disclosures will likely be unenforceable once the Bill becomes law.

What this means for settlement practice

Legal and regulatory constraints on confidentiality wording already exist. Employers cannot use NDAs to prevent disclosures required by law or disclosures protected under the whistleblowing regime. Solicitors are also prohibited from drafting clauses that mislead individuals about their rights to report wrongdoing to regulators or law enforcement. The existing Bill reinforced this by expressly classifying disclosures about sexual harassment as protected disclosures.

The proposed amendments go further still. They would void any clause that attempts to prevent a worker from speaking about harassment, discrimination, or the employer’s response, whether or not the disclosure qualifies under whistleblowing law. This broadens the type of statements that may now fall outside the scope of enforceable confidentiality.

Some commentators have questioned whether the proposed provisions could make employers more hesitant to settle disputes where confidentiality cannot be guaranteed.

In practice however, commercial settlement will often remain the most pragmatic option. Employers can still agree financial terms, a waiver of claims, and confidentiality clauses that protect genuinely sensitive information.

The proposed reforms do not prevent the parties from agreeing not to make derogatory comments, or from settling on a factual narrative that both sides can share. These tools can still help reduce risk and provide clarity.

More broadly, a shift towards transparency may offer opportunities for employers to reinforce trust. Where issues are handled fairly, lessons are learnt, and steps are taken to prevent recurrence, reputational damage can often be minimised without needing to rely on silence. Indeed, openness about an organisation’s approach to addressing concerns may in some cases serve to strengthen internal culture and external confidence.

Next steps

We will continue to monitor the progress of these provisions as the Employment Rights Bill moves through Parliament. For the latest updates, please bookmark our Employment Rights Bill tracker and check back for the latest updates as the Bill develops.

For more information or advice, please contact Joanne Oliver or Jessica Scott-Dye in our Employment team.

Jannica is our Talent Acquisition Lead (Lawyers), in our People and Culture team.

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