The Government has confirmed that it is going ahead with its proposals to regulate confidentiality clauses in settlement agreements and employment contracts, largely as set out in its March consultation. The consultation response confirms that, “when Parliamentary time allows”, the Government intends to:

  • legislate to ensure that a confidentiality clause cannot prevent an individual disclosing to the police, or to regulated health and care professionals or legal professionals (who are themselves covered by duties of confidentiality);
  • require that the limitations of a confidentiality clause are clearly set out in the clause (in settlement agreements) or in the written statement of particulars (where included in an employment contract), using clear, plain English and specific wording about what information cannot be shared and with whom. The Government does not intend to prescribe a particular form of wording, or require there to be agreement on acceptable wording that the employee can use in job interviews or conversations with colleagues, family and friends, but it will produce guidance on the drafting requirements.
  • legislate to require an individual signing a settlement agreement to receive independent legal advice specifically on the nature and limitations of the confidentiality clauses.

Breach of the drafting requirements will render the confidentiality clause in a settlement agreement void in its entirety (without voiding the whole agreement). A failure to provide a compliant written statement of employment particulars could lead to a declaration and potentially additional compensation of 2 or 4 weeks’ pay (subject to the statutory cap for a week’s pay) if the individual brings a successful tribunal claim. The new enforcement arrangements will not apply retrospectively.

These changes do not take up all of the recommendations made by the Work and Equalities Select Committee (see here) and the Government has promised to respond more fully to those recommendations in due course. However, the Government is consulting further on possible interventions through the GEO consultation on sexual harassment in the workplace ending on 2 October 2019. This seeks views on a number of specific proposals including the introduction of a duty on employers to take all reasonable steps to prevent harassment in the workplace (the scope of which would be clarified by a statutory code of practice), employer liability for third-party harassment subject to a reasonable steps defence, an extension of the three-month time limit for bringing discrimination and harassment claims to six months, and protection for volunteers and interns. Any changes will apply to all forms of harassment.

Suggested possible enforcement measures in relation to the proposed new duty to take reasonable steps to prevent harassment include investigation and enforcement action by the Equalities and Human Rights Commission, enforcement by individuals either as a standalone claim or contingent on a harassment claim, financial penalties (perhaps mirroring the remedy for failure to inform and consult on a TUPE transfer of 13 weeks’ gross pay), and obligations to publish or report on prevention and resolution policies and/or the number of harassment complaints.

Meanwhile, a report of the Women and Equalities Committee published on 30 July 2019 strongly criticised the EHRC’s failure to use its enforcement powers more proactively to tackle institutional and systemic discrimination, and its reliance on individuals bringing their own tribunal claims once discrimination has occurred. In particular, the Committee urged the Commission to support a ‘critical mass’ of cases (rather than just those that create legal precedent) and to partner with regulators, inspectorates and ombudsmen to increase enforcement action in their sectors.

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819