Employment Rights Bill: non-disclosure agreements 

As the Employment Rights Bill approaches its third and final reading in the House of Lords, the Government has approved a last-minute amendment relating to the use of non-disclosure agreements (NDAs) by employers. 

What do the new provisions say? 

Under a new provision in the Bill (clause 22A), employers will be prevented from using NDAs to prevent a worker making an allegation or disclosure of information relating to ‘relevant harassment or discrimination’. Any such agreement, whether in the form of a confidentiality clause in a settlement agreement or employment contract, or a standalone NDA, will be void once these provisions are in force. This will apply to most forms of harassment or discrimination on grounds of a protected characteristic under the Equality Act 2010, although as presently drafted it does not apply to a failure to make reasonable adjustments or to victimisation. 

The restriction on the use of NDAs will apply to allegations made against an employer or a fellow worker, by both current and former workers. It will also include disclosures about how an employer has responded to the individual’s allegations or disclosures.  

The new provisions include the power for separate regulations to specify an ‘excepted agreement’, to which these new restrictions would not apply. At present it is not clear what type of agreement might be excluded.  

What’s the current position on NDAs? 

It is already well established that an NDA cannot be used to prevent the reporting of criminal activities to the police; this has recently been codified under the provisions of the Victims and Prisoners Act 2024, which takes effect on 1 October 2025. 

There are also existing statutory provisions in force relating to whistleblowing, meaning that NDAs cannot be used to prevent an individual from making a protected disclosure. Even before this amendment was tabled, the Employment Rights Bill included an express provision to bring sexual harassment allegations within the definition of a qualifying disclosure for whistleblowing purposes.  

In addition, many NDAs (including those in template settlement agreements) are already drafted to comply with regulatory requirements imposed by the Solicitors Regulatory Authority and the Financial Conduct Authority, meaning that confidentiality provisions do not apply to disclosures made to immediate family members, professional advisers, medical practitioners and certain authorities (including the police). 

The Birketts view 

In our experience, NDAs are used in an appropriate way by the majority of employers. Preventing their legitimate use in cases involving allegations of discrimination or harassment means that employers will potentially need to reassess their approach to settlement and consider defending unmeritorious claims, rather than opting for early commercial settlement without the reassurance of confidentiality. 

The provisions in the Bill applying to the use of NDAs will require further consultation and separate regulations to set out the details. It was not included in the Government’s recent implementation ‘roadmap’, so we do not yet have a timeframe for these provisions to take effect.  

Once it becomes clearer how these provisions are intended to work in practice, and once we have a date for implementation, employers will need to review any existing template agreements to ensure they comply with the new rules.