The Government has announced that the use of non-disclosure agreements (NDAs) and other forms of gagging orders to prevent workers from reporting discrimination, harassment and crimes will face changes in legislation to protect victims.
Under the new crackdown, there will be clarification that confidentiality clauses, including those which involve a cash payout, cannot prevent whistle-blowers from speaking to the police or disclosing information in any criminal proceedings.
The Prime Minister Theresa May said the crackdown will send a clear message to businesses following a number of high profile NDA cases, including the recent one involving Topshop owner Sir Philip Green who became embroiled in a legal battle with the Telegraph newspaper earlier this year.
The newspaper reported that five of the tycoon’s staff signed NDAs to allegedly keep sexual harassment complaints quiet, with one being paid more than £1 million.
The use of gagging orders in contracts is widespread to protect legitimate business information and interests.
Now under the proposed changes, the Government have said the new rules would, for the first time, introduce a clear, written description of rights before anything is signed in confidentiality clauses in employment contracts or within a settlement agreement.
The rules will also ensure a worker who signs up to a settlement agreement, receives independent advice which must cover the limits of any confidentiality clauses.
Their aim is to stop potential victims of harassment and discrimination from being silenced.
The Prime Minister said: “Sexual harassment is against the law and discrimination of any kind will not be tolerated – in the workplace, at home or in public.
“Over the past couple of years, we have seen brave individuals breaking silence on such behaviour, but too many are still facing the unethical misuse of non-disclosure agreements by their employers.
“We’re sending a clear message that a change in the law is needed to ensure workers are able to come forward, be aware of their rights and receive the advice they need before signing up to them.”