UK: Sexual Harassment In The Workplace And Non-Disclosure Agreements

Last Updated: 20 September 2018
Article by Anna Fletcher and Siobhan Bishop

This podcast focuses on some of the issues and risks surrounding sexual harassment in the workplace, especially in light of publicity around allegations of sexual harassment by senior individuals.


Siobhan Bishop: Hello and welcome to this podcast where we're discussing sexual harassment in the workplace. I'm Siobhan Bishop a Principal Associate in the Employment, Labour and Equalities Team at Gowling WLG and I'm joined by Anna Fletcher, a Director in our team.

Today we're going to focus on some of the issues surrounding sexual harassment in the workplace, especially in light of publicity around allegations of sexual harassment by senior individuals and social media campaigns such as the #metoo.

All of this comes at a time when there is an increased scrutiny in other gender and equality issues generally, such as the gender pay gap and the under-representation of women at senior levels in many organisations.

So Anna, let's look first at what we mean by sexual harassment in the legal sense and what is the extent of the problem in the workplace?

Anna Fletcher: Well Siobhan, when looking at sexual harassment you need to look at the Equality Act and in particular, Section 26(2) because sexual harassment is different to harassment on the grounds of or because of sex. Sexual harassment is unwanted conduct of a sexual nature which has the purpose or effect of violating someone's dignity and creating an intimidating, hostile, degrading, humiliating or offensive environment. And we know this is really prevalent in the workplace and we only need to look at reports such as the TUC Report from 2016 into this issue where it was reported that 52% of female respondents had experienced some form of sexual harassment at work. Only 20% of those respondents had reported that sexual harassment and of those, 70% said that nothing had changed and actually worse still, 16% said that the situation had actually got worse.

Siobhan: So the vast majority of instances of sexual harassment are not even reported but employers should still be concerned about the extent of the issue and dealing with it properly.

So whilst this is of course the right thing to do, it is also important given the increased attention on sexual harassment and the wider risk to the business which are not just legal risks. What else do employers need to be concerned about Anna?

Anna: Well there are an array of issues that employers need to be concerned about. So you can look at the more general HR issues. So having to deal with grievances within the workplace and the disputes and tensions that that can give rise to. Dealing with Employment Tribunal claims and dealing with what we might describe as reverse tribunal claims where the alleged harasser subsequently brings a claim against the employer. So it's not just the person who makes the allegation. There may be issues in relation to recruitment and retention if staff feel that it's not an organisation where they want to work, not an organisation that they want to join to work and that impacts on the sort of battle for talent, if you like, particularly where you're looking at recruitment.

And then there is the impact on productivity. So if you know that if you have an organisation when morale is low and people are not perhaps concentrating necessarily on the work that needs to be done, that can have a negative impact on productivity and we know that, for example, it's now fairly common place for people to make subject accessed requests under the data protection legislation to gather information about themselves to determine if there may be the potential for a claim outside the scope of tribunal litigation where the disclosure exercise would kick in.

We have issues around adverse publicity and I think that's been borne out by the very significant media coverage in this particular area. And the spotlight here has been I think you could say almost every sector. We've had banks, we've had charities, we've had professional services all under scrutiny and all these areas of business are at risk. I don't think there's a single sector that couldn't say that it could necessarily assume that it'll escape the spotlight at some point.

We know that in terms of PR the media is very, very keen to name and shame where allegations have been made which don't involve litigation and it's worth remembering that although reporting restrictions can be made by the Employment Tribunal, those of course will only be made once litigation is up and running.

We have financial implications; customer backlash. So in a slightly different way, I suppose if we look, for example, at Sports Direct and the way that people objected to the working practices, you can see why people may vote with their feet if they object to these sorts of allegations being made against organisations, particularly if those allegations are then made out.

We have huge interest amongst shareholders and investors and it's been reported that investors who see sexual harassment in the workplace see that as a by product of weak policies, procedures and controls.

There's a shareholders' lobby group called the 'Pensions and Investment Research Consultants' and they're calling for an independent audit trail on sexual harassment and that's because often where allegations are dealt with, perhaps, by way of a settlement agreement, those sign-off authority levels are unlikely to reach the level of the Board so these things don't come to Board attention necessarily.

And the Financial Reporting Council is consulting on changes to the provisions of the Corporate Governance Code to ensure that there's greater transparency on sexual harassment.

So there are a range of issues which can impact on the business and, of course, from a personal perspective, if you're the individual who perhaps is accused of harassment and you lose your job, you lose your income and your career and your personal reputation amongst other issues.

And then, of course, there are the issues in relation to regulatory repercussions where these issues may be reported to the regulator and then the risk of other claims. So claims involving for example, whistle-blowing allegations. There may be claims outside the Employment Tribunal for personal injury, psychiatric damage. And of course, also the risk of criminal proceedings being brought depending on the nature of the allegations that are being made.

Siobhan: OK I'm just picking up on one of those points which was the publicity angle. And of course, we've seen the use of non-disclosure agreements being brought into quite sharp focus recently. These are the so-called, 'gagging clauses' which are often used in settlement agreements where an individual is settling a claim and basically agrees not to disclose the circumstances relating to that claim to anybody else, with very limited exceptions. However, there's been extensive criticism of how these non-disclosure agreements have been used in some cases. Where are we now?

Anna: Well, where we are now is it's quite clear, it's permissible to use non-disclosure agreements, the NDAs, but what we need to be careful about is that there is nothing in the NDA that prevents an employee from blowing the whistle or disclosing information as required by law or for criminal proceedings.

So it is permissible and of course, the NDAs are generally there to protect employer's confidential business information rather than to gag individuals. So used appropriately, they continue to be quite effective. There are some professional rules out there now. The Solicitors' Regulatory Authority issued a warning notice back in March in relation to the use of NDAs and we know that the use of NDAs of itself can create that risk of adverse publicity. So, for example, if you think about the media coverage of the President's Club situation where non-disclosure agreements were required before the event actually took place from the ladies who were intending to host the event, that demonstrates that that was an inappropriate use of an NDA and you wouldn't expect somebody to be promising not to mention or discuss anything where in fact, the event hadn't even taken place.

And then in terms of the future, we know that the Equality and Human Rights Commission have been looking at this issue in relation to NDAs and talking about NDAs that prevent future disclosure or rather the disclosure of future acts being void and various other recommendations that they're making.

Siobhan: So we've recently had a report from the Women's and Equalities Select Committee on sexual harassment in the workplace and how widespread it is and what its impact is.

What are the key recommendations coming out of that report?

Anna: So the first recommendation that's been made by the Committee is that sexual harassment should be put at the top of the agenda and there are some guidance given by the Committee as to what that would look like. So they talk about the introduction of a new duty on employers to prevent harassment. This will be supported by a statutory code of practice outlining the steps that employers should be required to take and also ensuring that where you have interns or volunteers, those who might be considered to be vulnerable and those who are harassed by third parties should have access to the same legal protection and remedies as their workplace colleagues. And of course, that harps back to the removal of third party harassment some years ago.

Secondly, there's a recommendation that regulators should take a more active role starting by setting out the actions that they'll take to help tackle this problem, including the enforcement actions that they'll take and making it clear to those that they regulate that sexual harassment is a breach of professional standards and a reportable offence with sanctions.

Thirdly, there's a recommendation that would make the enforcement process work better for employees. So for example, by setting out in that statutory code of practice what employers should do to tackle sexual harassment and reducing the barriers that are in place in terms of employees taking claims forward to the Employment Tribunal including extending the time limits for submitting claims, introducing punitive damages for employers and reducing cost risks for employees.

Then there's a recommendation that the use of non-disclosure agreements should be cleaned up. Going back to what I said earlier, this would see the requirement for the use of standard plain English in the confidentiality clauses that are being produced which sets out the meaning, the limit and the effect of the clause and making it an offence to misuse such clauses.

And then extending whistle-blowing protection so that disclosures to the police and to the regulator such as the Equality and Human Rights Commission are protected.

And then very finally, a recommendation that there should be the robust collection of data on the extent of sexual harassment in the workplace and on the number of Employment Tribunal claims involving complaints of harassment of a sexual nature. So much to look forward to.

Siobhan: Indeed, it's quite clear that the spotlight is not moving away from this area any time soon.

So thank you very much Anna for all those interesting points and reminders of where we're going and if you would like to discuss any of these issues in more detail, please feel free to contact Anna.

Thank you.

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