Ungagging Of Victims Of Harassment And Discrimination

Employers will no longer be able to use a gagging clause to silence victims of harassment and discrimination under proposed new employment legislation.

A confidentiality provision in a Non-Disclosure Agreement (NDA) including an Employment Contract and Settlement Agreement will be unenforceable if it prevents a worker from making an allegation or disclosure about harassment or discrimination, including sexual harassment, under a significant amendment to the Employment Rights Bill.

The proposal together with new changes to reinforce employer obligations to take "all" reasonable steps to prevent sexual harassment, and to prohibit third party harassment, form part of the government's strategy to tackle rising sexual abuse and discrimination in the workplace.

An NDA describes any agreement which contains a confidentiality or non-disparagement clause which restricts what a worker can say about their employer, other employees or their complaints. Whilst these types of agreement are often used to prevent the disclosure of trade secrets and intellectual property, they are also used to silence workers from speaking out about their complaints of harassment and discrimination, and their alleged perpetrators.

Under the proposed law, a worker could not be stopped from making a "relevant disclosure" relating to:

• Discrimination and harassment including sexual harassment:direct discrimination, indirect discrimination and discrimination arising from disability (as defined by the Equality Act 2010). It is unclear whether it covers victimisation and the failure to make reasonable adjustments.

• Employer response:how the employer responds to allegations of harassment or discrimination.

There is scope for certain agreements to be "excepted" in future regulations which would allow a restriction of information. This might be possible where the worker specifically requests a Settlement Agreement and has taken legal advice on the scope of the confidentiality restriction. Further detail as to the definition of an "excepted agreement" has yet to be provided.

The Employment Rights Bill is currently being scrutinised by the House of Lords and will have its third reading later this year.

If it is passed, various limbs of the law are likely to be implemented mid to late 2026.

Since October 2024, employers must take "reasonable steps" to prevent sexual harassment in the workplace under changes to the Equality Act 2010. An Employment Tribunal may increase compensation up to 25 percent in successful harassment claims where the employer has not demonstrated it took "reasonable steps" to stop the sexual conduct. Commentators complained that the purpose of the law was to make employers take proactive action and to take "all reasonable steps" to prevent abuse. The law was also silent on the third party harassment of employees.

The Employment Rights Bill seeks to remedy the situation by requiring employers to take "all reasonable steps" to prevent sexual harassment, thereby making it very hard for employers to avoid paying additional compensation in successful sexual harassment claims in the Employment Tribunal. It will also make employers liable to pay extra compensation in successful claims of third party sexual harassment of their staff unless they took all reasonable steps to protect their workers.

In addition the reporting of sexual harassment will amount to a protected disclosure under the Employment Rights Bill.

Helen Murphie, a Partner in the employment team at ebl miller rosenfalck said: "The amendment in relation to NDAs is a massive game changer for victims of harassment and discrimination, and will stop employers from using the law to silence workers from speaking out about discrimination and harassment and naming perpetrators."

"By protecting the rights of victims of discrimination and harassment, it will help prevent the "cover up" of serious allegations of workplace abuse and bullying. Coupled with the requirement on employers to take all reasonable steps to prevent sexual harassment in the workplace, it puts even more pressure on companies to take a hard look at their workplace culture, management and practices, and at certain individuals including senior executives whose bad behaviour may have been tolerated because of their status or financial contribution."

"Many victims of discrimination and harassment prefer to settle their claims. This may be for many reasons including that they may be vulnerable, may not wish to relive their experience and come face to face against their perpetrator in court, or they may be overwhelmed and or intimidated by the legal process and may not have the mental resilience and or funds to pursue a protracted Employment Tribunal case.

"One effect of the new law may be that employers may be less inclined to settle discrimination and harassment claims if they will not be able to rely on a confidentiality clause to stop allegations from being aired publicly. This may be more likely in situations where an employer believes it has a reasonable chance of defending the claims which it may genuinely believe are unwarranted or made in bad faith. Employers will also need to give greater consideration to reputation management."

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