Further to our recent article, the Department for Business, Energy & Industrial Strategy has now set up a consultation on confidentiality clauses (including those used in settlement agreements), and their alleged misuse in workplace harassment and discrimination cases. The consultation is entitled: "Confidentiality Clauses: Consultation on measures to prevent misuse in situations of workplace harassment or discrimination", and the deadline for responses is the 29th April 2019."
Consultation On Confidentiality Clauses
In setting up the consultation on confidentiality clauses, the Business minister, Kelly Tolhurst, stated: "There is increasing evidence that confidentiality clauses are being abused by a minority of employers to intimidate victims, conceal harassment and discrimination in the workplace – including sexual assault, physical threats and racism. This is unacceptable. Today’s proposed reforms will help put an end to the unethical use of these agreements and encourage good practice from employers and lawyers.....Most businesses legitimately use NDAs and confidentiality clauses in agreements to prevent the disclosure of confidential information. In addition, Settlement Agreements are often utilised to help resolve workplace disputes without the need to escalate matters further. However, a minority abuse their power in the workplace to conceal victims of harassment or discrimination through NDAs or confidentiality clauses.....The proposals set out today will help end this unethical practice, through extending the requirement to receive independent advice to cover limits on confidentiality clauses, and by requiring that signatories must be provided with a clear overview of their rights."
The Proposals
The proposals for action set out in the consultation on confidentiality clauses, include the following:-
- New legislation stipulating that confidentiality clauses cannot prohibit a disclosure to the police
- Making it a legal requirement that the limits of any confidentiality clauses be set out in contracts of employment and in settlement agreements
- A requirement that the independent legal advice on the settlement agreement includes advice on the limits of any confidentiality clauses. The settlement agreement would specifically confirm that the advice must cover the limits of any confidentiality clauses, and presumably this would include a clause in the advisers certificate that such advice was duly provided.
- Any confidentiality clause contained within a settlement agreement which fails to meet the new requirements, would be void and unenforceable
