Restricting the use of NDAs

The scope of the proposed new regulation of confidentiality clauses - also known as non-disclosure agreements (NDAs) - has been published.

Following a consultation earlier in 2019, and as part of its plans to combat sexual harassment at work, the government has set out how it’ll proceed regarding the tighter regulation of NDAs.

New legislation will be introduced:

  • to provide that confidentiality clauses cannot prevent disclosures to the police and regulated healthcare/legal professionals
  • to specify that any limitations imposed by such clauses are clear to those signing them, i.e. clear and specific and not give the impression that the employee cannot disclose information to the police about harassment, discrimination or other crimes. This will apply to clauses entered into at the start of employment (where the limitations will have to be explained in the written statement of terms (sec. 1 statement)) and those in settlement agreement at the end of employment
  • to augment the law on independent legal advice (which someone must receive before signing a settlement agreement) to ensure that the person receives advice specifically on any confidentiality provisions and the limitations of them

As regards enforcement, any confidentiality clause in a written statement that does not meet the new requirements will be able to be challenged via the existing tribunal mechanism for addressing issues with written statements – and may lead to additional compensation. For confidentiality clauses in settlement agreements, no details on enforcement measures have been provided (the original proposal was that offending clauses would be void in their entirety).

As regards a timetable for bringing forward the required legislation, the government states that this’ll happen ‘when Parliamentary time allows’.