Summary
It is completely unacceptable that allegations of unlawful discrimination and harassment in the workplace are routinely covered up by employers with legally drafted non-disclosure agreements (NDAs). It is clear that in some cases allegations of unlawful discrimination are not investigated properly—or at all—by employers. The difficulties of pursuing a case at employment tribunal and the substantial imbalance of power between employers and employees, mean that employees can feel they have little choice but to reach a settlement that prohibits them speaking out.
Our Report shows unequivocally that in many cases signing a non-disclosure agreement is not benign. And we challenge the Government to act to change this now. The most shocking evidence given to our inquiry has been the detrimental effect an NDA can have on the lives of ordinary people. We received evidence from those who, after signing an NDA found it difficult to work in the same sector again. Some suffer emotional and psychological damage as a result of their experiences, which can affect their ability to work again or to move on. Some also suffer financially as a result of losing their job and bringing a case against their employer.
The wider effects of NDAs are also deeply troubling. Victims may be reluctant to report their own experience for fear that their allegations will not be taken seriously or investigated properly and that they will lose their job. This cover-up culture has to be challenged. NDAs should not be used to silence victims of discrimination and harassment. Employers and their legal advisers should not be complicit in using NDAs to cover up allegations of unlawful acts.
Discrimination at work is unlawful and employers should not have the option to cover it up through the use of NDAs. They have a duty of care to provide a safe place of work for their employees and that includes protection from unlawful discrimination. Insufficient focus and force from regulators to require employers to do more to protect employees has to change.
It is in the public interest that employers tackle discrimination and harassment and that allegations of such behaviour are investigated properly and not covered up by legally sanctioned secrecy. The Government has to reset the parameters within which NDAs can be used and must address the failure of the employment tribunal system to ensure all employees who have experienced discrimination have a meaningful route of legal redress.
Some organisations now routinely settle employment disputes without the use of NDAs. We are recommending a package of measures to ensure more follow suit.
Our key recommendations are that the Government should:
- ensure that NDAs cannot prevent legitimate discussion of allegations of unlawful discrimination or harassment, and 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;
- require standard, plain English confidentiality, non-derogatory and similar clauses where these are used in settlement agreements, and ensure that such clauses are suitably specific about what information can and cannot be shared and with whom;
- strengthen corporate governance requirements to require employers to meet their responsibilities to protect those they employ from discrimination and harassment; and
- require named senior managers at board level or similar to oversee anti-discrimination and harassment policies and procedures and the use of NDAs in discrimination and harassment cases.
We also renew our previous calls for the Government to:
- place a mandatory duty on employers to protect workers from harassment and victimisation in the workplace; and
- urgently improve the remedies that can be awarded by employment tribunals as well as the costs regime to reduce disincentives to taking a case forward. Tribunals should be able to award punitive damages, and awards for the non-financial impact of discrimination should be increased significantly.
These actions must be taken urgently to bring about an immediate step change in the use of NDAs in discrimination cases.
Published: 11 June 2019