45% of respondents have experienced workplace discrimination

 Studies suggest that workplace discrimination remains a large-scale problem. The government’s newly published Impact Assessment for these proposals, cites that 45% of respondents to a 2024 CIPD survey stated they had experienced some form of workplace discrimination. Champions of the proposals cite the misuse of NDAs, with abusers being protected whilst the victims and witnesses are silenced. We’ve certainly seen some high-profile cases, such as Harvey Weinstein, where people have broken their NDAs to speak up and expose abuse.  

However, there may be unintended consequences. For many employers, confidentiality is a key factor when agreeing to settle a dispute. If the option to settle under an NDA is removed, will employers prefer to run the risk of seeing litigation through to its end?  

If that is the approach, this would mean that a worker’s only route to compensation becomes public and protracted litigation (subject to their right to seek anonymity, but only in limited circumstances, and subject to the tribunal’s approval). Whilst the government’s Impact Assessment identifies this risk, it does not go as far as trying to quantify the additional burden placed on ACAS and the tribunal system. With tribunals already underfunded and many claims taking one to two years to be heard, it could be questioned whether this route really offers justice and fairness, or whether workers will be stuck in their own version of Jarndyce v Jarndyce. How many employees will simply ‘give up’ in the face of potentially costly and stressful legal proceedings against an employer who is better resourced than they are?  

Included in the proposals is a power to have “excepted agreements” where the ban does not apply. The Republic of Ireland (who banned NDAs in 2024) have a similar system, whereby an NDA can be used if the employee requests it, and prior to entering into it they receive independent legal advice. The UK may follow a similar approach, but so far, we have no guidance on what “excepted agreements” may look like or how they could be entered into although the newly issued government Impact Assessment suggests that an employee will be able to request an NDA. 

What should we do now?

This provision was not included in the recent Employment Rights Bill Roadmap and so it is not clear when this proposed change will take effect. Therefore, for now, employers can continue to use settlement agreements and confidentiality agreements in the usual way – but it’s important to remember that there are already limitations on how NDAs can be used.  

Employers are already encouraged to consider whether NDAs are truly required when entering into contracts and settlement agreements and, in any event, NDAs should not be used to prevent or deter an individual: 

• From co-operating with a criminal investigation or prosecution. 
• Reporting an offence to a law enforcement agency. 
• Reporting misconduct, or a serious breach of regulatory requirements to relevant regulatory bodies. 
• Making a protected disclosure under the Public Interest Disclosure Act 1998 (i.e. blowing the whistle). 
• Making any disclosure required by law. 
• Making a proper disclosure about the agreement or circumstances surrounding the agreement to professional advisers, such as legal or tax advisors and/or medical professionals and counsellors, who are bound by a duty of confidentiality.  

In the longer term, with the comfort of NDAs gone, employers who do not already do so may be forced to tackle discriminatory and abusive workplace cultures, rather than responding in a purely reactive way that has otherwise only been addressed when a complaint is raised. It seems that the overall aim is for workplaces to evolve to a model of shared responsibility and interdependence, with core principles of respect, equality and accountability, held as a shared responsibility and a common value. Over time, this may improve workplace cultures, reduce turnover and absenteeism and build a positive reputation.  

Whilst for many employers this approach is already baked into their workplace practices and culture, for others this proposal might provide an appropriate juncture to take stock and make changes before any ban comes into force. To help address these employers should: 

1. Establish clear policies. 
2. Provide training and education. 
3. Promote a respectful culture, led from the top. 
4. Have clear reporting and investigation procedures. 
5. Regularly review and evaluate and take on board any lessons learned.  

How we can support you

If you need help to prepare your workplace for the proposed ban on NDAs, please contact Charlotte Smith or Alice Ruffell.