A general ban?

This development impacts Higher Education bodies only, but would apply equally to complaints raised by students and staff. In some cases, this will limit the ability of Higher Education bodies to enter into the usual provisions we would expect to see in settlement agreements with employees which are being used to settle potential claims. Such clauses usually permit employees to still make disclosures in accordance with legal and regulatory obligations, but prevent general dissemination of the details of allegations.

It has been reported in the press that the Government is considering amending the Employment Rights Bill, which is currently passing through Parliament, to include a general ban on the use of NDAs, which would therefore impact all employers, and not just Higher Education bodies. The details currently available are minimal so it is unclear how wide the ban might be, if this is added to the Bill, but it seems possible a general ban could mirror the scope of the Higher Education ban in the type of allegations which it concerns, so affecting allegations of harassment, bullying and sexual misconduct, and could even extend to other forms of discrimination.

In practical terms, any ban would not prevent the use of settlement agreements, but could mean that any provisions in such an agreement seeking to prevent the employee from disclosing the allegations or the existence of the agreement could be invalid.

Possible implications of a ban

Few would argue in principle against an attempt to prevent the silencing of victims speaking out about abusive managers and colleagues. Greater accountability for such behaviour enables businesses to get a better understanding of genuine workplace culture and allows better protections to be put in place for other employees.

However, not all allegations of bullying, harassment and sexual harassment are genuine, or material. In those cases, where amicable resolutions are achieved, confidentiality can allow both parties to move on, or for an innocent manager’s career to continue untarnished. NDAs can also prevent malicious publishing of allegations on social media, which can quickly spread, and damage reputations permanently.  Other methods for controlling the dissemination of such material, such as actions for defamation, can be time consuming and can fail to have impact before the worst of the damage is done.

As such, a general ban would be likely to mean a greater risk of allegations making their way into the press and causing reputational issues. If there is no ability to stem the tide of publicity surrounding the allegations, employers are much more likely to want to defend claims in an Employment Tribunal, to at least have their version of events on the record. This could create even more litigation for an already overwhelmed Tribunal system, and leave employees without a resolution for months or years, when previously they may have settled a claim at an early stage for a guaranteed sum.

Concerningly, a ban on NDAs also could have the unintended consequence of fewer victims coming forward to raise concerns, if they know they are likely to be pushed into stressful and potentially expensive litigation to prove their claims are true. In some cases, confidentiality provisions can help employees to reach closure on a distressing incident and allow them to move on.

Truly damning allegations that are likely to be accurate could seriously harm a business’s reputation, and some employers may choose to focus greater efforts on the prevention of actions giving rise to allegations through training, for example, or taking a firmer approach with ‘repeat offenders’.

Learning from other jurisdictions

The UK would not be the first to see a ban on NDAs. Similar changes to the law have already been made in Ireland, Canada and the US, where NDAs cannot prohibit disclosure of sexual harassment, discrimination or bullying without it being the expressed wish of the employee.

In Ireland, in late 2024, the Maternity Protection, Employment Equality, and Preservation of Certain Records Act 2024 introduced significant changes to the Employment Equality Act 1998 (the Act), particularly regarding NDAs.

The Act now restricts the use of non-disclosure provisions in cases involving allegations of discrimination, victimisation, harassment, or sexual harassment. NDAs that prevent employees from disclosing these allegations or actions taken in response to them are now void, except under specific circumstances outlined in the Act.

NDAs will remain valid if they are part of a Workplace Relations Committee (WRC) mediation or meet the criteria of an “excepted” NDA. For an NDA to be “excepted”, the employee must request the NDA and receive independent legal advice, the cost of which must be covered by the employer. The NDA must also meet other specified formalities.

It is too early to tell how the changes in Ireland are working in practice, however the criteria for an excepted NDA will naturally give rise to questions about what constitutes a “request” by an employee for an NDA. It may be that the continued ability to include NDAs in relation to discrimination, harassment, etc., in settlement agreements as long as the agreement states that the employee requested the NDA means that nothing has really changed and there is a sizeable loophole in the ban in practice.

How can we support you?

For the time being, UK employers should be mindful of the direction of travel. Prudent employers will focus greater efforts on the prevention of bullying, harassment and sexual harassment in the workplace to reduce the need to rely on NDAs should their use be restricted in future. Read our advice on how to prevent sexual harassment here.

Should you wish to discuss this topic further, Dominic Mantle and Lucy Gordon are happy to help.