Victoria Moves To Restrict NDAs In Workplace Sexual Harassment Cases

Victoria's proposed Restricting Non-disclosure Agreements (Sexual Harassment at Work) Bill 2025 aims to stop non-disclosure agreements (NDAs) from being used to silence workers and conceal sexual harassment in the workplace. If passed, the legislation will apply to public and private sector employers six months after commencement, and no later than November 2026.

A key component of the Bill is a restriction on any contractual term or clause, including those in settlement agreements or employment contracts, that seeks to prevent a party from disclosing certain information about workplace sexual harassment connected to Victoria. It covers both explicit prohibitions on communicating facts about harassment and indirect restrictions embedded in non-disparagement or confidentiality provisions.

If the proposed laws are enacted, Victorian employers will only be able to require or suggest an NDA in sexual harassment settlements if the complainant specifically requests one. Employers will also be required to provide the complainant with a detailed information statement, allow a 21-day review period before signing (subject to waiver) and must avoid exerting any undue pressure throughout the process.

Under the Bill, 'employer' is broadly defined and encompasses any person who employs another under a contract of service, engages a person under a contract for services, contracts for work on a commission basis, or employs individuals on an unpaid or voluntary basis. Importantly, 'worker' includes a person employed or engaged under the Public Administration Act 2024 or by statutory appointment, and extends to those working wholly or partly on commission, unpaid workers or volunteers and contractors and commission agents.

An NDA must not prevent the complainant from disclosing material information to certain people or bodies such as the police, family and friends, mental health professionals and legal practitioners (for obtaining legal advice). Complainants would also have the right to terminate an NDA after 12 months, releasing both parties from confidentiality obligations. Any contractual penalty for unenforceable or terminated NDAs would be void.

If a complainant believes the statutory preconditions for entering into an NDA have not been met, they may issue a breach notice to the other party. The employer or other recipient then has 30 days to apply to the Industrial Division of the Magistrates Court for a declaration that the preconditions were satisfied. If no application is made within this period, the agreement is deemed unenforceable to the relevant extent.

Similar protections exist overseas. The United Kingdom and Ireland have equivalent laws, while in the United States, more than half the states, including California, New York and Washington, have enacted statutes prohibiting or severely restricting NDAs in sexual harassment settlements. At the federal level, the Speak Out Act, which came into effect in 2022, establishes a national baseline for pre-dispute agreements.

While we wait for the Bill to become law, employers in the public and private sector should review their current use of NDAs. Policies, procedures and guidelines dealing with the resolution of sexual harassment complaints will need to be amended to align with the rights that will be afforded to complainants.

If you have any questions about this article or need assistance with reviewing any clauses regarding NDAs, please contact us below.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.