The Employment Rights Act 2025 has introduced a significant new provision (that amends the ERA 1996) aimed at curbing the misuse of confidentiality clauses in the context of workplace harassment and discrimination.
Any clause in an agreement which seeks to prevent a worker from making allegations or disclosures relating to harassment or discrimination will be unenforceable.
This change represents a clear legislative response to long-standing concerns about the misuse of non-disclosure agreements (NDAs) to suppress allegations of misconduct.
The policy objective is clear; the government want to stop victims of harassment and discrimination from being forced into silence.
Key changes to non-disclosure agreements (NDAs)
In simple terms, if an NDA forms part of a settlement agreement, employment contract or a stand-alone confidentiality agreement, it will no longer be able to prevent workers from talking about:
– allegations of harassment or discrimination
– information relating to those allegations
– disclosures on how the employer responded to the allegations
This would apply not only where the worker themselves is the alleged victim, but also where the allegations relate to harassment or discrimination suffered by another worker. It also covers alleged conduct by either the employer or fellow employees.
It would include sexual harassment, harassment and discrimination covered by The Equality Act 2010. It would not affect the use of NDAs for protecting trade secrets, commercially sensitive information or intellectual property.
In practical terms, confidentiality clauses that restrict disclosures about discriminatory or harassing behaviour in settlement agreements will no longer be enforceable.
Exceptions to the reforms
The legislation does leave scope for exceptions. The government will now run a consultation to identify the specific scenarios where there may be an exception. Detailed regulations will then be issued.
At this point in time we don’t know what these exceptions will be, but the direction of travel is clear – blanket gagging clauses will no longer be tolerated.
A notable omission is victimisation
One striking feature of these new reforms is that it doesn’t appear to include victimisation as detailed under the Equality Act 2010.
This means that a confidentiality clause that prevents a worker from alleging they were subjected to detriment because of a discrimination complaint, may not fall within the protection of the new reforms.
Whether this omission was deliberate or an oversight remains to be seen, but it leaves a potentially significant gap.
Consequences for settlement agreements
The most immediate practical impact will be on the negotiation of settlement agreements, as many traditionally include a confidentiality clause.
Employers have typically been willing to offer enhanced payments in return for non-disclosure of the circumstances of their departure or any underlying allegations. These new reforms will remove that leverage.
An employee would no longer be able to validly sign away the right to make or repeat allegations of discrimination or harassment, regardless of what a settlement agreement says.
This may discourage employers from settling as they may feel they have less to gain from reaching a negotiated exit if confidentiality cannot be secured. Some may take the view that there is little downside in waiting to see whether the employee actually brings a claim.
Creating a cultural shift on workplace misconduct
These new reforms reflect a wider and more deliberate cultural change in how workplace misconduct is addressed. The law is moving away from the private containment of discrimination allegations and towards transparency and accountability.
Employers can no longer rely on confidentiality clauses in settlement agreements as a mechanism to manage or suppress allegations of harassment or discrimination.
As a result, organisations will need to focus far more closely on prevention rather than containment. The emphasis must be on ensuring that the workplace itself, and the working relationships within it, are genuinely free from discrimination and harassment.
Effective policies, meaningful training, prompt and impartial investigations, and a culture in which concerns are taken seriously will become even more critical.
The practical reality is that employers will not be able to buy silence in relation to allegations of harassment and discrimination. Allegations of discriminatory conduct may be made or repeated regardless of any agreement reached on termination.
This shift in the balance of power should encourage employers to address issues at an earlier stage rather than attempting to deal with them through NDAs at the point of exit.
Recommended next steps for employers
Whilst this legislation is being finalised it’s important for employers to take a look at their current internal processes and paperwork to prepare.
– review and update of standard employment contracts
– review and update of all existing NDA templates
– review of anti-harassment policies and reporting
– updated training for HR teams and managers
– review and update existing settlement agreement wording
– review internal investigation and safeguarding processes
These new restrictions will create a significant shift in how confidentiality is managed in relation to harassment and discrimination cases, and employers will need to be ready to ensure compliance.
For now, we await the promised regulations setting out what the limited exceptions may look like. But the message from Parliament is already unmistakable; when it comes to harassment and discrimination, enforced silence is no longer an option.
If your organisation would like help with anything mentioned in this article please get in touch.