The government has launched a consultation on its proposals to prevent the misuse of non-disclosure agreements (NDAs) in cases involving workplace harassment and discrimination. We consider how these measures will impact employers.
What are non-disclosure agreements?
Non-disclosure agreements are commonly used to maintain confidentiality over sensitive matters such as trade secrets or business information. However, they have also been criticised for being misused to silence victims of harassment, discrimination, or sexual misconduct.
Reform under the Employment Rights Act 2025
Through the Employment Rights Act 2025, the government is introducing a measure which will void any provision in an agreement (such as a contract of employment or settlement agreement) between a worker and their employer that prevents a worker from speaking out about relevant harassment or discrimination.
“Relevant harassment and discrimination” refers to certain types of misconduct as defined in the Equality Act 2010, including direct and indirect discrimination, disability and reasonable adjustments discrimination, gender reassignment discrimination, pregnancy and maternity discrimination and harassment, including sexual harassment.
Government consultation
The consultation seeks views on:
- the conditions which need to be met for an NDA to still be validly entered into (an ‘excepted agreement’) in cases of harassment and discrimination (including a requirement for the worker to receive independent legal advice before entering into the agreement).
- the individuals or bodies who workers covered by an excepted agreement can speak to about the harassment and discrimination, irrespective of what their NDA says (‘permitted disclosure’) (i.e. a qualified lawyer, a regulatory body and close family members). The government is also seeking views on including prospective employers in the list.
- expanding the types of individuals the legislation applies to beyond the definitions of employee and worker used in the Employment Rights Act 1996. This may include agency workers, self-employed individuals, and those carrying out work experience.
The consultation is open for responses until 11.59pm on 8 July 2026. The government will publish a response, with the changes expected to be implemented in 2027.
Cost to businesses of reforms
The Department for Business and Trade has published an Options Assessment for regulations to prevent the misuse of NDAs as part of the government’s consultation on this issue.
The Options Assessment sets out the likely direct monetary costs to businesses of implementing the policy, with estimated one-off familiarisation costs of £47.8m and one-off implementation costs of £2.4m. Despite these costs, the Options Assessment highlights these measures could benefit businesses through “reduced workforce turnover, lower absenteeism and improved productivity”.
These reforms aim to strike a balance between the legitimate uses of NDAs and the need to protect employees from unfair treatment, fostering a workplace culture of openness and accountability.
