The Victorian Government is taking steps to prohibit the use of Non-Disclosure Agreements, sometimes called "gag orders", to silence employees. This landmark decision comes as the State's Ministerial Taskforce on Workplace Sexual Harassment released 26 recommendations for the Government to implement in response to growing demand for reform in regard to sexual harassment in workplaces. The taskforce had released 26 points for the Victorian Government to take account of, 21 of which were accepted fully, in part or in principle.
One of these recommendations outlined the need for legislative amendments to restrict the use of NDAs in relation to workplace sexual harassment cases in Victoria. The Government accepted this in principle conceding that moving forward, significant work is required before any amendments can be made to regulate the use of NDAs in workplaces. Noting the uses that NDAs may have for the employer and employee, the Victorian Government needs to be careful to balance the interests of both parties in regard to the reforms in the future.
The Report
In addition to this, the report addressed the need to treat gendered violence and workplace sexual harassment as an occupational health and safety issue. This means that harassment in the workplace will be covered by the Occupational Health and Safety Act 2004 in the future and afford greater protection for employees. The OHS regulator, WorkSafe, has also been given greater funding to prevent and respond to gendered violence and sexual harassment.
What can we see in the future for NDAs?
As part of the recommendation, the taskforce recommended introducing legislative measures from overseas such as the Irish Employment Equality (Amendment) (Non-Disclosure Agreements) Bill 2021 and lessons from other jurisdictions as the model for reform. Following from this, we can see how the Victorian Government may amend the use of NDAs through legislation from abroad.
Employers and Employees can expect to see the scope of NDAs greatly reduced with the opportunity for employees to waive their own duty of confidentiality in the future and because NDAs may only be able to last for a set and limited duration past an employee's period of employment. Greater transparency and choice will be accorded to employees as the Irish Amendment Bill addressed how before entering into an NDA, the employer must offer full independent legal advice at their own expense and must not unduly influence the relevant employee in respect of the decision to include a confidentiality clause.
Overall, employees and employers should see less protections afforded by NDAs in the near future if the Victorian Government proceeds with legislative change in this area.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
