A significant impact of the Employment Rights Bill proposed by the Labour government, still under consideration, is a new provision. It aims to void confidentiality clauses or Non-Disclosure Agreements (“NDAs”). These agreements try to prevent a worker from disclosing allegations or information around complaints of harassment and/or discrimination.
Tessa Harris, Employment Law Director at Redmans Solicitors, comments on why employers may need to reconsider their use of NDAs. She points to growing legal and ethical scrutiny regarding termination agreements.
What is an NDA?
An NDA is an agreement between an employer and employee. It restricts their ability to share or disclose certain pieces of information. You tend to see NDAs at the start of employment, when starting a project, when working with a client, or at the end of employment through a mutual termination agreement.
In the case of termination agreements, employers use NDAs to ensure that employees don’t inform third parties about the circumstances giving rise to the termination agreement. This includes details of grievances or complaints. It is basically to protect the company’s reputation.
As an employment lawyer, advising on NDAs in termination agreements is common practice, and if the employee is happy to ‘draw a line under the matter’, it is lawful to enter into them.
House of Commons’ Proposal in the Employment Rights Bill
On 15 September 2025, the House of Commons sought to strengthen the proposed provision. They aimed to no longer allow NDAs to cover harassment or discrimination by broadening the scope of the NDA ban.
The proposal included confidentiality clauses that seek to prevent a worker from disclosing a failure to make reasonable adjustments. This refers to a claim brought under the Equality Act 2010.
The Specifics
The Employment Rights Bill proposes that any provision in an agreement becomes unenforceable. This includes provisions that stop a worker from disclosing or making allegations about harassment, discrimination, and now, failure to make reasonable adjustments by the employer or a colleague.
This provision is expected to apply to former employees; it may even include contractors, volunteers, and people on work experience.
At present, the proposal does not extend to claims for victimisation, but there is still time for this, should the House of Commons wish to add an additional provision.
Currently, the Employment Rights Bill remains in the “ping pong” stage and has now returned to the House of Lords. The House of Lords are scheduled to consider the House of Commons’ responses on 28 October 2025.
The potential outcome is to accept the responses from the House of Commons or insist on their own amendments. However, it is expected that the Lords will largely accept the provisions. It is parliamentary convention to accept the Government’s manifesto commitments.
Implications for the Employer
Mutual termination agreements often include a confidentiality clause or an NDA. These are so employers can protect their legitimate business interests and reputation. Now, most current termination agreements also involve clauses addressing discrimination complaints.
Keeping the details of the complaint confidential and waiving the right to raise concerns regarding discrimination is an incredibly prevalent and legitimate action when concluding complaints with an employee. However, the provisions of the Employment Rights Bill will, in effect, remove this benefit for the employer.
This means allegations of harassment, discrimination, and failure to make reasonable adjustments will no longer be silenced. Whilst an employee will not necessarily proceed with a claim in the Employment Tribunal by entering a termination agreement, they will be able to speak about their experiences and complaints against their employer.
The possible implications of this for an employer’s reputation could be significant. It could open the floodgates to others within the organisation to raise such complaints, whether justified or not. Alternatively, it could detrimentally impact retention levels and even future recruitment. Employee review websites such as ‘Glassdoor’ are likely places where employees affected by alleged discrimination and harassment will voice their experiences. Equally, there is no stopping an employee from reporting their experience to the media.
Knock-On Effect on Tribunals and Hiring
It may also be possible that fewer termination agreements are put in place due to the reduced incentive for the employer. They may decide to risk litigation instead. This could then incidentally have a knock-on effect on the number of claims submitted to Acas and the Employment Tribunal. The tribunal is already under significant pressure from the high volume of cases received.
Equally, an employer may be less inclined to hire or grow because of the risks to them as an employer. This could again have a detrimental effect on the national unemployment rate and the general economy. At present, this is all speculation as the Employment Rights Bill has yet to come into force. However, it is likely to, and as such, we need to be ready for all possible implications.
What Can Be Done Now?
When there are significant changes being considered by the government that will impact employment law rights, it is always a good idea to consider what initial steps could be taken. These steps would help lessen the impact should the laws change.
In respect of the likely possibility of using NDAs in termination agreements, there are several steps an employer could be taking in readiness:
- Most employers will have template agreements ready for proposing to employees. As such, a review of such documents and updating them to remove the NDAs referring to harassment, discrimination and failure to make reasonable adjustments should be considered. If an employer is unclear on what to amend, seeking legal advice is always the best way forward.
- Consider what investigation procedures and internal confidentiality clauses are currently in place and see whether they are compliant with the proposed new law.
- Evaluate current policies that are already in place to show what reasonable steps are being taken to prevent discrimination or harassment.
- It is also advisable to strengthen risk assessments, training programmes demonstrating steps taken to prevent harassment and discrimination, and absence management policies to incorporate flexibility to adapt to individuals’ circumstances and needs.
Having conversations now with managers, HR, and legal advisers will best prepare employers for the changes coming in, so they are ready.
Final Thoughts
Overall, the law has yet to be changed, but it is highly likely that change will happen. The use of NDAs will no longer be the same as they have been previously. As such, employers need to be prepared as best as possible.
The implications could be significant, but only time will tell how significant these will be. However, it is key to start thinking about the potential impact future changes could have on businesses now.
Seeking legal advice on what businesses already have in place and what changes need to be made to what is already implemented will be key. This will assist companies in mitigating the impact on them when the Employment Rights Bill comes into effect.
Tessa Harris is the Employment Law Director at Redmans Solicitors. She focuses on litigation, particularly in areas such as disability discrimination and absence management.
