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

Be ready to stop using agreements that prevent workers from making harassment or discrimination allegations

Situation before the Employment Rights Act 2025

Non-disclosure agreements (NDAs) are often used as part of settlements – for example, a confidentiality clause in a settlement agreement is an NDA. Currently, NDAs are only prohibited when it comes to allegations of whistleblowing and certain issues around victims of criminal conduct. 

So what’s changing and when?

The Government has acknowledged that businesses need to use NDAs to protect sensitive business and commercial information, but its 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 use an NDA to stop a worker from making 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 if the employer gave a poor performance review as a result of an allegation). It is not completely clear, but third-party harassment claims are likely to be included. There is also some uncertainty around whether all types of victimisation are covered. 

The change will also apply to non-disparagement clauses (clauses in an agreement that prevent both parties making derogatory comments about the other). This means that a worker will not be breaching a non-disparagement clause if they talk about harassment or discrimination, or an employer’s response to it, even if this is in disparaging terms.

These changes 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.

The Government plans to consult on these proposals and it is currently unclear when they would take effect. Although it is likely that the legislation will permit some exceptions (for example, if the NDA is requested by a worker), this detail is likely to be set out in regulations.

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

Bhayani Law advises employers on the practical and legal implications of changes to employment law, including the evolving use of NDAs. We can support you by:

• Reviewing and updating settlement agreement templates and confidentiality clauses.

• Advising on compliant approaches to resolving harassment and discrimination allegations.

• Updating workplace policies and providing tailored guidance on risk management.

• Supporting managers and HR teams with training and best-practice advice.

• Advising on sensitive exit negotiations in light of the new legal framework.

If you would like to discuss how these changes may affect your organisation, Bhayani Law is here to help.

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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.