The government has confirmed in the Employment Rights Act 2025 (and regulations to follow) that any Non-Disclosure Agreement (NDA) which attempts to stop a worker speaking about harassment or discrimination will become void.
There have long been calls for reforms to the use of non-disclosure agreements (NDAs), especially where they prevent disclosures about sexual harassment. The Women and Equalities Committee recommended back in 2019 that the law should change and there has been much campaigning to outlaw these “gagging clauses”. The position of the campaign groups has been that employers have been using these clauses to effectively permit harassment to continue unabated. The previous (Conservative) government did not take the recommendation forward, and (until recently), the Labour government’s proposals concerning NDAs have been unclear. However, shortly before the Employment Rights Bill was finalised into an Act, it put forward proposals to ensure that NDAs were included in the wider fundamental enhancement of workers’ rights.
That is not to say that confidentiality will be impossible for employers. It won’t. But there will be restrictions to their use which will be limited to circumstances where it is categorised as an “excepted agreement”. It is not clear at this stage what coverage will be provided by an “excepted agreement”. There will be a consultation to follow on this point.
What this means for employers
Current NDAs used in settlement agreements or contracts will no longer be able to prevent workers from talking about:
- allegations of harassment or discrimination
- information relating to those allegations
- how the employer responded to the allegation.
This includes sexual harassment, bullying amounting to harassment, and other forms of discrimination covered by the Equality Act 2010.
Importantly, these changes do not affect the legitimate use of NDAs for protecting commercially sensitive information, trade secrets or intellectual property.
Key changes explained
1. NDAs cannot silence workers about harassment or discrimination
The new rules are set out in section 202A into the Employment Rights Act 1996. Any clause attempting to prevent disclosure of “relevant harassment or discrimination” will be void.
This applies whether the NDA is in:
- an employment contract
- a settlement agreement
- a stand‑alone confidentiality agreement.
2. ‘Excepted agreements’ will be allowed – but the rules are not final yet
The Act allows the government to create a framework for NDAs that remain valid in limited circumstances. These will be known as excepted agreements.
Regulations will set out:
- the conditions an agreement must meet to remain enforceable
- who the worker can still speak to (e.g., GP, therapist, lawyer)
- whether the rules should be extended beyond “workers” to contractors, agency workers or the self-employed.
Northern Ireland has already adopted a similar model, where an NDA is only enforceable if:
- it is requested by the employee
- the employee receives independent written legal advice
- the employer covers the reasonable cost of that advice.
This gives a strong indication of what may be adopted in Great Britain.
3. More scrutiny of confidentiality in settlement agreements
Most employers currently use template NDAs in settlement agreements without distinguishing between:
- commercial confidentiality
- confidentiality about the circumstances of the dispute.
Under the new rules, if the background involves harassment or discrimination, the confidentiality clause cannot prevent future disclosure.
This will require careful redrafting of standard settlement agreement templates.
4. The changes are not yet in force
The government will run a consultation and publish regulations.
There is no confirmed commencement date yet.
Until the date is announced, the existing legal position still applies — but employers need to prepare.
5. The measure will not apply retrospectively
Only agreements entered after the new law comes into force will be affected.
Risks and considerations for employers
1. Settlement behaviour may change
Some commentators and lawyers have criticised the changes, stating that it this new law will discourage employers from settling when the background events and circumstances involve harassment and discrimination. The position some are taking is that employers will be less willing to pay to settle. Currently, if they do so in conjunction with the use of an NDA, they have complete peace of mind that there will be no claim and there will be no further complaint, potential complaint or bad publicity. With the underlying risk that alleged (or, of course, actual) events may be made public, this could discourage employers from settling (or settling at a level acceptable to the claimant), which will result in more instances of individuals having to resort to litigation and less agreed settlements.
This could mean:
- more claims issued
- higher legal spend
- less control over publicity.
There is some logic to this argument. However, it is also evident that the current system isn’t working. There remain frequent reports of incidents of sexual harassment which then, upon further investigation, reveal that others have complained previously but exited the organisation and been subject to NDAs thereby preventing disclosure and investigation of matters and the continuation of the unhealthy status quo – the harasser simply continues harassing. The most high-profile example of this was Zelda Perkins, who was the PA to Harvey Weinstein in the UK, who then became a vocal campaigner in respect of the use of NDAs.
However, many employers and HR professionals see the reforms as positive and necessary in restoring confidence in reporting procedures. This was demonstrated in a recent CIPD survey in September 2024 report (“How employers are tackling bullying and harassment at work”), which asked HR professionals about the use of NDAs when dealing with harassment in the workplace:
- nearly one in two employers (48%) would support the introduction of a ban in the use of NDAs in cases of harassment and discrimination
- just over a fifth (22%) of employers use NDAs
- over a third do not know whether they do use NDAs or not
- just under two thirds of employers (65%) didn’t know the extent of their use in their settlement agreements
- if dealing with allegations of sexual harassment, while over a third don’t know.
2. Managing ongoing reputational risk
As a consequence of these changes, workers will be free to speak about their experiences even after settlement. This may very well increase the risk of allegations being made public after their exit. Employers will therefore need to consider and reflect upon the fairness and robustness of their internal processes when dealing with such issues to ensure that this risk is managed.
3. HR teams may need additional training
The government’s factsheet (and the CIPD survey) highlights low levels of understanding among employers about:
- when NDAs are used
- what they do and don’t cover
- their limitations in discrimination cases.
Awareness of the way that their settlement agreements (in particular) are used and drafted will be a key step change for some businesses. Reliance by some businesses on existing templates without reflecting these upcoming changes will clearly present a notable risk.
4. Review of standard employment contracts
Confidentiality clauses in contracts and policies may continue to be valid for commercial matters, but cannot override the worker’s right to speak about discrimination or harassment.
Recommended next steps for employers
Immediate actions
- review existing NDA templates (contracts, policies, settlement agreements)
- identify where clauses could become void once the law changes
- update training for HR, managers and anyone negotiating settlements.
Before the new law comes into force
- consider whether confidentiality is genuinely needed in discrimination‑related cases
- start preparing revised settlement agreement wording that aligns with the new requirements
- put in place robust internal investigation and safeguarding processes – confidentiality can no longer be used to hide systemic issues.
What else is happening?
This isn’t all the legislation that is being introduced (or has recently been introduced) to tackle harassment and discrimination in the workplace. Below is a summary of the other changes:
Whistleblowing
Any NDA which tries to prevent whistleblowing is already unlawful. There is a further change in the Employment Rights Act 2025 that will mean that from April 2026, an allegation/disclosure of sexual harassment will be a Protected Disclosure for the purposes of whistleblowing legislation. Section 23 of the ERA 2025 will amend the definition of qualifying disclosure to include a disclosure that sexual harassment “has occurred, is occurring or is likely to occur”. That is not to say that such disclosures of sexual harassment were not necessarily Protected Disclosures previously, but this change to the law clarifies that they are specifically included. This change will provide additional protections in respect of detriment and dismissal.
Proactive duty to take “all” reasonable steps to prevent harassment
In October 2024, a legal obligation was placed on all employers to take “reasonable steps” to prevent sexual harassment in the workplace. If an employer failed to take these proactive steps, then compensation in such cases could be increased by tribunals by up to 25%. There is also provision for enforcement action against employers by the Equality and Human Rights Commission.
The bar is moving upwards in October 2026 to require employers to take “all” reasonable steps – instead of just taking reasonable steps.
There is currently no guidance on what this additional duty will obligate employers to do. Rather frustratingly, the government has indicated that regulations which will set out what is meant by “all reasonable steps” will not be published until 2027. The guidance that is available at the moment (published by the EHRC is available here: Employer 8-step guide: Preventing sexual harassment at work | EHRC
Harassment by third parties
Section 21 of the Employment Rights Act 2025 will reintroduce employer liability for third-party harassment in relation to all relevant protected characteristics (not just sexual harassment) where both:
- the third party harasses the employee in the course of their employment; and
- the employer fails to take all reasonable steps to prevent the third party from doing so.
A “third party” will mean a person other than the employer or one of its employees. For employers in customer‑facing sectors like hospitality and retail, meeting the duty to take “all reasonable steps” to prevent third‑party harassment will be especially tough. Employers simply don’t have the same control over customers and service users as they do over their own staff, making the duty far more burdensome in practice. This was a key concern raised during the Employment Rights Bill’s second reading in the House of Lords on 27 March 2025. The government acknowledged the issue, confirming, consistent with its factsheet published the same day, that expectations on employers will be lower when it comes to preventing harassment by third parties than harassment between employees.
The government has reaffirmed that this is intended to be introduced in October 2026.
Summary
In summary, the new NDA restrictions mark a significant shift in how employers manage confidentiality in harassment and discrimination cases. While commercial confidentiality remains unaffected, employers will need to update their templates, processes and training to ensure compliance once the regulations take effect. With further reforms on the horizon – including expanded whistleblowing protections and the upcoming duty to take all reasonable steps to prevent harassment – now is the time for employers to review their practices, policies and training to strengthen their culture and reporting procedures.
You can read my previous article regarding NDAs being made unlawful here.