Key takeaways
NDAs to be limited in harassment cases from 2027
Most confidentiality clauses void unless strict exceptions are satisfied.
Excepted agreements add procedural hurdles
Legal advice, written consent, cooling-off periods create delay.
Permitted disclosure rights will remain broad
Workers may still speak to regulators, advisers, supporters.
The Employment Rights Act 2025 includes provisions which render any confidentiality/non-disclosure provision (often called NDAs) in an agreement between an employer and a worker (whether in an employment/worker contract or not) void and unenforceable, if the provision(s) purport to prevent a worker (whether they are a victim or witness) from making an allegation or disclosing information relating to work-related harassment and discrimination. The new rules are expected to be introduced in 2027. However, the restrictions on NDAs will not apply to an ‘excepted agreement’.
The conditions for an ‘excepted agreement’ will be set out in regulations (not yet been published). In preparation for these, the government has recently launched a consultation on regulations to prevent the misuse of NDAs, which indicates a clear direction of travel in relation to the proposed scope of and conditions for an ‘excepted agreement’.
In short, employers will face significant additional hurdles and delays if they want to agree an NDA in a case involving discrimination or harassment. This may prove especially problematic when the NDA forms part of a wider settlement of employment claims, particularly where the settlement is reached close to a key deadline (such as a time limit expiring, or immediately prior to a hearing). Overall, it will likely be necessary for the employer to turn its mind to settlement earlier where an NDA is desired.
In summary, the consultation seeks views on:
The conditions for an ‘excepted agreement’
The government proposes that a series of conditions must be met for ‘excepted agreement’:
Legal advice: it is proposed that the worker should receive independent legal advice before entering the NDA. The employer will not have to fund this advice (although it is expected employers will continue to do so where the NDA forms part of a settlement agreement). The consultation also considers whether Acas should be able to provide this advice to a worker where the NDA forms part of a COT3 settlement. Acas is already overstretched and underfunded though, and it is not clear if any additional funding or resources will be provided to enable this advice to be given by Acas in a timely fashion. In practice, as most NDAs form part of a settlement agreement, upon which legal advice must already be received for it to be legally binding on the worker, this step adds very little in the way of protection for the worker.
Written confirmation of preference: it is proposed that, after receiving legal advice, the worker must express their preference to enter into the NDA in writing. The consultation confirms the government does not propose to require specific wording for the worker to express their preference to enter into the NDA. The consultation suggests this written confirmation of preference to enter into an NDA must occur ‘before’ the agreement is entered into. However, it is not clear how long before – a few minutes, a few hours, a day or more? Although this condition adds an extra documentary step into the process, in practice it may amount to little more than signing an extra letter when entering into an excepted agreement containing an NDA.
14-day cooling off period: it is proposed that there should be a 14-day cooling off period, within which the worker could change their mind about entering into an NDA and ‘withdraw’. In practical terms, employers are likely to hold payment of any settlement monies until this period has passed. Withdrawing from the NDA may in practice involve withdrawing from the entire settlement, which may pose particular challenges when settlement is achieved close to an employment tribunal hearing. Views are also sought on whether workers should be permitted to ‘waive’ the cooling off period. Perhaps a waiver offers a potential solution to the problem a 14-day cooling off period would cause when a settlement reached close to a final hearing.
Provision of a written copy: it is proposed that a written copy of the excepted agreement must be provided to all parties so they can better understand what they have agreed to. Views are also being sought on whether the agreement should also be written in plain language. In practice, where an NDA forms part of a settlement agreement or COT3, the worker will already receive a copy so this additional step is only likely to be relevant for stand-alone NDAs.
Previous conduct not future conduct: it is proposed that the NDA will only be able to relate to conduct that has already taken place and cannot apply to conduct which occurs in the future. The consultation notes that NDAs are sometimes added to employment contracts to prevent workers from speaking out against future instances of discrimination and harassment. Such agreements would be void and could not be considered to be an ‘excepted agreement’. In practical terms, where the employment continues, this means disclosures regarding new acts which post-date the NDA would be permitted.
Should NDAs be time-limited: the consultation also seeks views on whether NDAs in excepted agreements should be time-limited (with options between 1-10 years being discussed).
Permitted disclosures after entering into an excepted agreement
The government proposes that, even after they have signed an excepted agreement containing an NDA, workers will remain legally entitled to make “permitted disclosures” to specified individuals for specified purposes. It proposes that this should include:
any person/body with law enforcement functions (for any purpose)
qualified lawyers / registered foreign lawyers (for the purpose of seeking legal advice)
regulated professionals (for the purposes of obtaining professional support in relation to the relevant harassment and discrimination)
tax advisors (for the purpose of seeking advice on any financial compensation received)
any individual / organisation providing victim support services (for the purpose of obtaining support from that service);
a regulatory body, such as the EHRC (for the purpose of making a disclosure, co-operating in an investigation or seeking advice regarding the harassment or discrimination)
an individual / organisation that provides services for the purpose of advising individuals on their employment rights, conciliation, arbitration and mediation as it relates to settlements (e.g. Acas) (for the purposes of obtaining confidential advice and support)
various trade union representatives (for the purposes of obtaining confidential advice and support)
a person who is authorised to receive information on behalf of a person specified for any of the above purposes
or close family members, such as a child, parent, partner (for the purpose of obtaining support in respect of the relevant harassment and discrimination).
The government is also seeking views on whether to include prospective employers, recruiters or a wider group of family and friends in the list of persons to whom permitted disclosures can be made for specified purposes. It is also notable that there is seemingly no obligation on family members (and friends if the list is expanded to include those) receiving such a disclosure to themselves maintain confidentiality. In practical terms, permitting wider disclosure in this way increases the prospects that there will be a breach of confidentiality and it may be very difficult to prove the underlying source of any breach.
Possible extension to non-workers
The government is also seeking views on whether the protection against NDAs relating to discrimination and harassment should be extended in the future to other categories of individuals who do not fit within the usual statutory definition of worker but who are also vulnerable to the misuse of NDAs.
For example, this may in the future include:
agency workers
seconded workers
individuals on a work experience placement
nurses and midwives in training
certain NHS workers not already covered.
The government is also considering whether certain groups of self-employed individuals should also be protected.
Do the proposals strike a fair balance for the employer, employee and society?
There is no doubt a very difficult balance to be struck between promoting the early settlement of disputes without recourse to the employment tribunal, allowing an employee to be compensated for the discrimination or harassment they have suffered, allowing employers to deal with these matters within their own internal disciplinary and grievance procedures whilst maintaining confidentiality, and the interests of wider society in preventing long-term secrecy and avoiding perpetrators remaining hidden to continue their harmful behaviours.
When the ban on NDAs in discrimination and harassment cases was first proposed, some of the loudest voices of objection came from lawyers who represent claimants. They pointed out that many claimants – especially those in small workplaces or communities – value their privacy and that the offer of an NDA was often the strongest tool in the claimant’s toolbox when seeking settlement.
This consultation clearly seeks to reach a compromise between the competing interests, by allowing NDAs in harassment and discrimination cases where certain conditions are met, so as to exclude the agreement from the ban, whilst allowing the affected worker to continue to disclose in limited circumstances for permitted purposes.
Overall, it is clear that, from 2027, employers will face significant additional hurdles and delays if they want to agree an NDA in a case involving discrimination or harassment. We will report any developments in due course.
