Government consultation on restriction of non-disclosure agreements (NDAs) relating to discrimination and harassment

Background

The ERA 2025 ban on NDAs concerning discrimination and harassment works by making any term in an agreement between an employer and a worker (such as a settlement agreement or employment contract) void if it seeks to prevent the worker from alleging, or disclosing information about:

• Any "relevant" harassment or discrimination under the Equality Act 2010
• The employer's response to such harassment or discrimination
• The employer's response to the making of the allegation

Discrimination or harassment will be "relevant" where:

• The worker is a witness to discrimination or harassment committed by the employer or a colleague, or
• The worker or a colleague is a victim of discrimination or harassment, regardless of the identity of the perpetrator

Regulations will set out circumstances in which NDAs concerning relevant discrimination or harassment can be used. These permitted NDAs will be referred to as "excepted agreements".

What conditions should apply to excepted agreements?

In the consultation, the government proposes that excepted agreements should be subject to the following safeguards:

• The worker will have to receive written legal advice from a "relevant independent adviser". As with settlement agreements, relevant independent advisers would include qualified lawyers and authorised trade union officials. The adviser would have to be named in the NDA and have appropriate professional indemnity insurance in place. There would be no legal requirement for employers to pay for the worker to receive the advice. However, the consultation indicates that the government expects employers to contribute to the cost of such advice, as is common practice with settlement agreements.

• Having received independent legal advice, the worker would then have to express their preference in writing to enter into an excepted agreement. This is intended to protect against coercion by ensuring the worker's clearly stated informed consent. The consultation also seeks views on whether an excepted agreement could be made where the initial suggestion of confidentiality came from the employer, for example in an initial conversation about settlement, noting that the risk of coercion in these circumstances may be mitigated by the other safeguards the government is proposing (e.g. independent legal advice and a cooling off period).

• Excepted agreements should include an explicit, mandatory cooling off period of 14 calendar days from the date they are entered into, during which the worker could withdraw from the agreement without penalty. The consultation acknowledges that this could cause difficulties in practice where the excepted agreement forms part of a broader agreement (such as a settlement agreement or COT3), or where the parties are seeking to settle claims in the run-up to a tribunal hearing. The government is therefore seeking views on whether a shorter cooling off period (e.g. seven or ten days), or allowing the worker to waive the cooling off period, might mitigate these difficulties.

• Once concluded, an excepted agreement will have to be provided to all parties in writing, in a format accessible to them (including any party with a disability), to ensure workers can refer back to the agreement to check their understanding of its terms.

• The government is also considering whether excepted agreements should have to be written in "standard, plain language" to ensure workers understand their rights and obligations. However, technical language may be necessary in some cases, and there would be a risk of satellite litigation around the "plain language" requirement. Moreover, the requirement for independent legal advice should itself ensure that workers understand what they are signing. The government is therefore proposing to deal with the issue of appropriate language for excepted agreements in guidance rather than regulations.

• Excepted agreements will only cover past incidents of relevant harassment or discrimination. They will not be able to prevent workers from speaking out about harassment and discrimination that may occur in the future.

• The government is considering whether excepted agreements should be time limited in order to reduce the chance that perpetrators of discrimination and harassment can remain hidden and continue their harmful behaviour.

What disclosures should be permitted when an excepted agreement is in place?

The consultation also seeks views on the individuals to whom workers who have signed an excepted agreement should still be able to make "permitted disclosures".

Under the current law, an NDA cannot prevent a worker from:

• Making a protected disclosure (whistleblowing)
• Reporting a crime to the police
• Sharing information with specified individuals to get advice and support, in accordance with the Victims and Prisoners Act 2024, where the worker is the victim of a crime

In addition to this, the government is proposing to set out in regulations a list of persons to whom workers who have signed an excepted agreement should be able to make "permitted disclosures", e.g. to seek advice or support. The proposed list includes, for example, persons with law enforcement functions, qualified lawyers, healthcare professionals, tax advisers, victim support services, providers of employment rights advice such as Acas, trade union representatives, and close family members.

The consultation also seeks views on whether workers should be permitted to disclose information to prospective employers or recruiters, e.g. to explain why they may have gaps in employment, or their reasons for departure from previous roles. However, recruiters and prospective employers would not be bound by confidentiality, so the possibility of such disclosure by the worker may make previous employers less willing to enter into an excepted agreement.

To whom should the restrictions on NDAs apply?

The ERA 2025 provisions restricting the use of NDAs relating to harassment and discrimination currently only apply to employees and so-called "limb b" workers (i.e. individuals who work under a contract personally to perform services for another party to the contract who is not their client or customer). The government is seeking views on whether to extend the restriction to others, such as agency workers, workers on secondment, individuals on work experience, certain NHS workers who aren't caught by the existing provisions, and the self-employed.

Next steps

The consultation closes on 8 July 2026, after which the government will produce its response and draft regulations. The substantive restrictions on the use of NDAs are expected to take effect in 2027, although proposals to expand the categories of individual to whom the restrictions apply would only be brought in at some unspecified future date.

What does this mean for employers?

Many of the proposed safeguards for excepted agreements appear sensible and would not give rise to undue difficulty. For example, no responsible employer is likely to object to the requirement to provide the worker with a written copy of the agreement. The requirement for the worker to receive independent legal advice is reflective of the current position in respect of settlement agreements, although it does raise a potential issue in relation to COT3s. One advantage of a COT3 at present is that there is no requirement for the worker to be legally advised. If legal advice is a requirement of an excepted agreement, this may make the COT3 negotiation process slower and more costly. It is therefore encouraging that the government is considering extending the definition of independent adviser to include Acas conciliators, to cater for the scenario where an NDA is included within a COT3 agreement.

The safeguard likely to have the most significant impact, however, is the proposed mandatory cooling off period. Such periods are a feature of the law in the Republic of Ireland, where NDAs concerning discrimination and harassment have been subject to restrictions since November 2024. The Irish experience is that the cooling off period (which applies to the whole agreement, not just the NDA provisions) has been unhelpful and led to some settlements breaking down after they have been agreed. Some employers have chosen to carve out discrimination and harassment from their settlement agreement confidentiality provisions entirely, given the burden of complying with the conditions that attach to exempted NDAs. If a cooling off period is adopted in Great Britain, it could create significant uncertainty where the parties are attempting to settle claims on the eve of a tribunal hearing. It could also cause delays in the tribunal process, e.g. if a hearing is vacated when an agreement is signed, but the worker then withdraws during the cooling off period, a new hearing would need to be scheduled. Given current tribunal backlogs, this may be many months in the future.

Employers are encouraged to contribute to the consultation to share their views on the practicality and potential impact of the government's proposals. Once regulations are published, employers will need to review the confidentiality provisions in their template settlement agreements and contracts of employment to ensure they are compliant.

Given the other changes to the law on harassment under the ERA 2025 (strengthening the preventative duty so employers are required to take all reasonable steps to prevent sexual harassment, and making employers liable for harassment of their workers by third parties), employers would also be well advised to focus on preventing discrimination and harassment at work in the first place. Robust risk assessments, policies and training, as well as prompt investigation of any allegations that are made, will be key to mitigating risk.

Make Work Pay: Consultation on regulations to prevent the misuse of NDAs in cases of workplace harassment or discrimination