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Women & Equalities Committee NDA report highlights urgent need for reform

The Women and Equalities Committee have  published (June 11) their long awaited report on the use of Non Disclosure Agreements in discrimination cases – which clearly shows there is much room for improvement.

The inquiry – which Protect were asked to respond to by the Women and Equalities Committee – follows the committee’s work on sexual harassment in the workplace which had highlighted that some allegations of sexual harassment were being ‘dealt with’ using settlement agreements.  The committee set out to establish whether the picture was similar for people who had suffered other forms of unlawful discrimination and harassment and to follow up on the recommendations made in their earlier report.  Much of this work was also a reaction to the #Metoo movement which exposed the woeful culture in many workplaces and that many were being prevented from speaking out about unlawful behaviour.

The evidence gathered by the Committee clearly shows there needs to be a package of measures to improve matters.  The misuse of NDAs is one element of a wider system of legislative, regulatory and judicial measures and processes that are failing to protect workers from discrimination and abuse of power.

Here at Protect, we could not agree more with the Committee’s recommendations.  Many of the suggested reforms would also make a huge difference to those seeking protection under the whistleblowing legislation (the Public Interest Disclosure Act – ‘PIDA’).  This is particularly so  when it comes to the piecemeal reform of the legislation in this area and we are calling for a thorough review of PIDA along with this vital work on discrimination and harassment.

In summary, the committee have called for the following reforms:

  • Awareness campaign required for employers and employees about how to handle grievances fairly and effectively, including signposting to relevant guidance and support
  • Investigation required of all discrimination and harassment cases regardless of whether or not settlement is reached
  • Basic reference required in all cases (so employers cannot trade reference for settlement)
  • Noted risk of blacklisting caused by publication of judgments online – but no recommendations – we would say job applicant protection is required for all ET claims to mitigate the risk of this (in all relevant employment protection legislation ie also in whistleblowing protection legislation)
  • Time limit for claims should be extended for discrimination and sexual harassmsent  from 3 to 6 months – this should apply to PIDA claims too
  • Equality review of ETS required
  • Review of legal aid for discrimination and harassment (plus whistleblowing claims)
  • Review of practical support available for litigants in person in all employment protection legislation
  • Costs – detailed guidance for ET judges and litigants as to what behaviour would be deemed to be unreasonable – refusal to sign an NDA should never be deemed to be unreasonable
  • Review of awards and punitive damages as well as Vento guidelines (for non pecuniary damage claims) – plus a presumption that employers should pay litigants legal costs if  a claim is lost (referred to as one way costs shifting) – again this is also needed in whistleblowing claims
  • Legislation required to ensure that NDAs cannot be used to prevent legitimate discussion of allegations of unlawful discrimination or harassment, and in the public interest stop their use to cover up allegations of unlawful discrimination, while still protecting the rights of victims to be able to make the choice to move on with their lives
  • Piecemeal amendment of the
  • Equality Act and PIDA is problematic – HMG to consider how PIDA interacts with discrimination law and whether the public interest test is workable
  • It should be an offence for an employer or their professional adviser to propose a confidentiality clause designed or intended to prevent or limit the making of a protected disclosure or disclosure of a criminal offence
  • Legislation required to prevent NDA’s being used to stop others from being able to take a claim – consider pay secrecy provisions in EQA for this
  • Professional disciplinary offence to use inappropriate NDAs and confidentiality clauses
  • Employers to make a financial contribution sufficient to cover the costs of the worker’s legal advice on any settlement agreement proposed by the employer, including the content and effect of any confidentiality, non-derogatory or similar clauses, and any concerns about the reasonableness or enforceability of those clauses together with the cost of negotiation.  This should be payable regardless of whether agreement is signed
  • Legislation required within two years on wording of confidentiality, NDA and non derogatory clauses requiring them to:
    •  be clear and specific about what information cannot be shared and with whom;
    • contain agreements about acceptable forms of wording that the signatory can use, for example in job interviews or to respond to queries by colleagues, family and friends;
    • contain clear, plain English explanations of the effect of clauses and their limits, for example in relation to whistleblowing.
  • Standard wording and cost consequences for failing to provide standard wording
  • Rigorous enforcement required by regulators of legal professions
  • While code of practice welcome – there is still a need for a positive duty on employers to prevent discrimination or sexual harassment. This should include substantial financial penalties for breach
  • Named senior manager on board to oversee anti discrimination and sexual harassment as well as use of NDA’s
  • Guidance required for the ‘reporting up’ of allegations, particularly by lawyers
  • Data collection on discrimination and harassment cases is required as well as info on settlement agreements
  • Corporate governance around discrimination and harassment to be strengthened with sanctions for poor performance

We will be keeping a close eye on the pace of reform in this area and calling for the same considerations to be applied to PIDA.

Read Protect’s NDA consultation response

by Cathy James, Protect Senior Legal Consultant