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Confidentiality clauses and settlement agreements in situations of workplace harassment or discrimination

Businessman verifying the documents Print publication

23/05/2019

On 4 March 2019, and in the wake of #metoo and a number of high-level reviews, the Government issued a consultation on measures to prevent misuse of confidentiality clauses in situations of workplace harassment or discrimination.

It deals with situations where an employer may wish to use a settlement agreement or confidentiality clause in a situation where an employee has complained of sexual harassment or discrimination generally. The key points from the consultation are:

Disclosures to the police – The Government proposes to legislate to make it clear that employees are free to make disclosures to the police notwithstanding the existence of a settlement agreement, non-disclosure agreement (NDA) or confidentiality clause. It also seeks views on whether this should be extended to include disclosures to doctors or mental health therapists.

Settlement agreements – As the law stands, it is a statutory requirement for the employee to have received legal advice on the agreement or it will be void. The Government is considering introducing a further requirement for the employee to have received specific advice on the meaning of the confidentiality clause in particular, including a clear statement about its limits and what the employee is free to disclose, failing which the clause would be void.

Evidence of bad practice – The Government seeks views and evidence on the use of NDAs in the employment context and whether they have been used to cloud a worker’s right to make disclosures or which overstate the limits of a lawful confidentiality clause.

Further evidence of a direction of travel

The Government is clearly taking a more proactive stance in relation to sexual harassment in the wake of recent events reported in the media and this consultation is one example of this. It has already accepted that there needs to be a statutory Code of Practice on dealing with sexual harassment in the workplace and is also considering extending the limitation period for bringing a sexual harassment claim from 3 months to 6 months.

Good employers will already have sound policies, procedures and diversity/awareness training in place but it is important to avoid complacency.   Anti-harassment and discrimination measures should be challenged and tested by HR or senior management periodically to ensure that they are still working well and, most importantly, that staff know how to access them.

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