Recommendation 35

HM Government · verbatim extract Accepted in Part

The Government shares concerns that NDAs are being used to intimidate victims of discrimination and harassment into silence and is already taking action. 10 Sexism in the City: HM Treasury, Prudential Regulation Authority and Financial Conduct Authority Responses to the Committee’s Sixth Report As the Committee recognises, the Government has taken significant steps to prevent the use of NDAs in certain circumstances including in higher education, where students are in a particularly vulnerable position. The Higher Education (Freedom of Speech) Act 2023 will prevent HE providers using NDAs with staff, students, and visiting speakers in cases of sexual abuse, harassment or misconduct, and other forms of bullying or harassment. This is expected to take effect in August 2024. The Government has also committed to bringing forward legislation to clarify that NDAs cannot be legally enforced if they prevent victims from reporting a crime and to ensure information related to criminal conduct can be discussed with the following groups without fear of legal action: • Police or other bodies which investigate or prosecute crime. • Qualified and regulated lawyers. • Other support services such as counsellors, advocacy services, or medical professionals, which operate under clear confidentiality principles. There is, however, a legitimate place for clauses that protect commercially sensitive information, ideas or intellectual property in business transactions and disputes involving negligence claims. In the employment context, NDAs tend to be used in settlement agreements between an employer and an employee or worker at the end of an employment relationship. For a settlement agreement to be valid, it is a requirement for the individual to receive advice from a relevant independent adviser. There are legal limits to how NDAs can be used in an employment context, which means they are void and unenforceable in certain circumstances. An NDA will most likely be unenforceable to the extent that it seeks to prevent workers from reporting a crime to the police or cooperating in a criminal investigation, as this could be an attempt by the employer to pervert the court of justice or conceal a criminal offence. An NDA would also be unenforceable if it sought to prevent a worker from blowing the whistle by making a protected disclosure about wrongdoing to one of the categories of person set out in legislation, such as, a lawyer in the course of taking advice, or certain regulatory bodies or other prescribed person for whistleblowing purposes. There is comprehensive guidance available on NDAs that has been published by the EHRC and by Acas, the Advisory, Conciliation and Arbitration Service. The guidance makes clear that NDAs should not prevent individuals from making certain disclosures, including to the police as well as to medical and legal professionals. It seeks to address concerns that individuals, and some employers, are not aware of the legal limitations of NDAs. When it comes to sexual harassment and discrimination, it is important to recognise that individual circumstances vary. The Government consultation on “Confidentiality clauses: measures to prevent misuse in situations of workplace harassment or discrimination” in 2019 also heard evidence that many employees who sign a settlement agreement at the end of their employment with an organisation value the inclusion of confidentiality clauses, as they allow them to move on and make a clear break. Sexism in the City: HM Treasury, Prudential Regulation Authority and Financial Conduct Authority Responses to the Committee’s Sixth Report 11