David in HR Magazine – NDA ban represents a fundamental change for employers and employees alike
Discrimination NDA/gagging clauses ban would in my view be a blocker on victims getting justice, unless accompanied by an urgent overhaul and increased funding of the Tribunal system.
A planned ban on NDAs (gagging orders) in relation to discrimination and harassment in the workplace has just been announced by the Government.
The aim behind the ban is to shine a light on such discrimination and harassment, hopefully forcing a cultural shift against it by employer organisations.
Clause 22A of the Employment Rights Bill (if enacted) will render void any provision in an agreement between an employer and employee, such as an employment contract or settlement agreement, that seeks to prohibit the making of allegations or disclosures relating to harassment or discrimination (as defined in the Equality Act 2010).
The planned protection would apply regardless of the type of discrimination (not just sex discrimination) and whether the affected individual is the complainant or another employee.
It is worth noting that the new provision would not apply to allegations involving failure by an employer to make reasonable adjustments for a disability – meaning those types of allegations/claims can still be subject to NDAs.
This new clause added to the Employment Rights Bill represents a fundamental change for employers and employees alike. Employers will need to urgently review confidentiality wording in their employment contracts, policies and settlement agreements if the Bill is passed.
The ban if enacted may work counterintuitively, as employers would be discouraged from settling threatened harassment and discrimination claims, given they would no longer be able to require and ensure complete confidentiality (and protection of their reputation) as a condition of a settlement.
Without also properly funding and reforming the Employment Tribunal system to reduce the current and sizeable delays in cases getting to final hearing, such a ban would be detrimental in the short term for the victims of discrimination and harassment.
Currently it takes around a year for an employment claim to get to Tribunal. When eligibility to bring a claim for unfair dismissal applies from day one (another change proposed under the Employment Rights Bill) that delay will likely double to at least 2 years.
Not many employers will be open to accepting liability and reputational damage by agreeing to a settlement agreement without an NDA and so affected employees will have to bring tribunal proceedings, knowing any claim will take considerable time to get to final hearing.
This will likely lead to many affected employees simply either giving up, putting up with ongoing discrimination, or resigning – the opposite of a victory for those discriminated against (as widely reported).
Common Questions Answered
Why do I need a lawyer to review my settlement agreement?
UK law requires independent legal advice to be taken before a settlement agreement can become legally binding. Without it, the agreement is unenforceable. An experienced employment lawyer will ensure you understand every clause and that your interests are fully protected.
How much does it cost to get a settlement agreement reviewed?
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Often, yes. David regularly negotiates for increases in value, better exit terms and stronger protections for his settlement agreement clients. Even where an employer presents a figure as “final”, there is frequently room to negotiate.
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