The Women and Equalities Select Committee conducted an inquiry into the use of non-disclosure agreements (NDAs) in discrimination cases because of concerns that NDAs are being used to cover up allegations of unlawful discrimination and harassment in the workplace, sometimes without investigations into allegations taking place. Last week the Committee published its report, with a range of recommendations designed to encourage employers to settle employment disputes without the use of NDAs and to reduce the imbalance of power between employers and employees in relation to claims. The Committee's key recommendations for the government include:

  • Ensuring that NDAs are not used to prevent legitimate discussion of allegations of unlawful discrimination or harassment, or to prevent someone giving evidence in support of another person's claims;
  • Requiring employers to provide employees with a basic reference confirming dates of employment as a legal right;
  • Extending the time limits for bringing claims of sexual harassment or pregnancy/ maternity discrimination, and a review of the current time limits in other discrimination claims;
  • Improving the remedies available in discrimination claims, to include a significant increase in the Vento bands, punitive damages and a presumption that the employer will bear an employee's costs if it loses a sexual harassment claim;
  • Making it a professional disciplinary offence for a lawyer to advise on an agreement that includes an NDA that is potentially unenforceable;
  • Requiring employers to pay for a worker's legal advice on a settlement agreement, including advice on the content and effect of confidentiality clauses, and the costs of negotiating such clauses, regardless of whether a settlement agreement is ultimately entered into;
  • Legislating to make sure that NDAs are drafted in standard, plain English, with standard clauses on the damages that can be reclaimed if confidentiality clauses are breached;
  • Introducing a mandatory duty on employers to protect workers against harassment and victimisation in the workplace, with EHRC fines for non-compliance;
  • Obliging company boards to appoint a director or senior manager from a business function to oversee anti-discrimination policies and procedures and the use of NDAs; and
  • Requiring employers to report annually on the number of discrimination and harassment grievances received and their outcomes and the number of settlement agreements entered into that include NDAs.

Given the tone of the recent government consultation paper on confidentiality clauses, it seems relatively unlikely that the more radical of these recommendations will be pursued, at least in the short term. We are still waiting for the government response to that consultation exercise, as well as a consultation on a mandatory duty to protect workers against harassment, additional protection for volunteers and protection against third party harassment.

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