How the Employment Rights Act is changing non-disclosure agreements (NDAs)

Be ready to restrict your use of agreements that prevent workers from making harassment or discrimination allegations

Situation before the Employment Rights Act 2025

Non-disclosure and non-derogatory/non-disparaging agreements (which together we are referring to as ‘NDAs’) are often used as part of settlements – for example, a confidentiality clause in a settlement agreement is an NDA. In addition, they may be used in employment contracts and other contractual employment documentation.

So what’s changing and when?

The Government’s aim is to prevent employers from misusing NDAs to silence workers about harassment and discrimination.

Under the Employment Rights Act, an employer will not be able to misuse an NDA to stop a worker from making relevant harassment or discrimination allegations. It also won’t be able to stop the worker talking about the employer’s response to the harassment or discrimination, or how it responded when the allegation was made (for example, if the employer has failed to investigate an allegation, or gave a poor performance review as a result of a relevant allegation).

Employers will still be able to use NDAs in agreements that meet specific conditions for an ‘excepted agreement’, such conditions to be set out in regulations. Regulations may also be made to set out who workers with excepted agreements can still speak to, and to extend the protection against misuse of NDAs to a wider category of workers.

These changes under the Employment Rights Act will have a significant impact on the settlement of harassment and discrimination allegations, as well as the wording around confidentiality which is used in contracts and policies.

A Government consultation on proposals to prevent the misuse of NDAs in cases of workplace harassment and discrimination will close on 8 July 2026. The consultation is seeking views on proposals regarding:

• the conditions for an excepted agreement. For example, that an NDA may be valid if requested by the worker and, prior to entering into the agreement, the worker has received independent advice on 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 (for example, a qualified lawyer and medical professional); and
• expanding the types of individuals the legislation applies to beyond the definitions of ‘employee’ and ‘worker’ used in the Employment Rights Act 1996. For example, this may include some types of self-employed individuals.

It is expected that the changes to the law will take effect in 2027, and will apply to any NDA made between the employer and the worker after the commencement date. We expect the detail to be set out in regulations in due course.

What you need to do

The timing of some of these actions will depend on when the detail of the new laws is finalised and when the changes come into force. However, you can start to plan now:  

• Update your HR policies and practices (including template settlement agreements) regarding the use of NDAs and confidentiality wording.
• Take preventative measures to reduce harassment/discrimination risks within your organisation including dealing with any concerns that are raised by workers promptly, in a thorough and sensitive manner. In particular, review your anti-harassment/bullying and equality policies regularly and ensure that your managers are properly trained. The better you are at managing risks relating to harassment/discrimination, the less likely you are to have to rely on an NDA.
• Think  about how you could adapt the approaches you currently take to reaching a settlement/negotiating an exit with a worker.

How Bhayani Law can help

The Employment Rights Act will limit how NDAs can be used in cases involving harassment or discrimination. Employers will need to rethink how they manage complaints, investigations and exits, with far greater emphasis on prevention and fair process. 

Our HR and legal experts can help you adapt your approach. We can support you with: 

• Policy and template review: Reviewing HR policies, contracts and template settlement agreements to ensure confidentiality wording reflects the new restrictions. 
   
• Rethinking settlement and exit approaches: Supporting HR teams to adapt how disputes and exits are handled where NDAs can no longer be relied on in the same way. 
   
• Managing harassment and discrimination risk: Helping you to strengthen preventative measures, so issues are addressed early and less likely to escalate to settlement discussions. 
   
• Investigation and response processes: Reviewing how complaints are handled to ensure investigations are thorough and timely.  
   
• Manager training and confidence: Supporting managers to understand what they can and cannot rely on, how to respond appropriately when concerns are raised, and strengthening their leadership capability through practical development.
   
• Culture and behaviour assessment: Helping you to assess whether workplace culture and reporting routes encourage issues to be raised and addressed properly. 

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You don’t have to face the changes alone. Whether you need quick input or ongoing support, we can help you however works best for your business.