The Equality and Human Rights Commission has this week published new Guidance on the use of confidentiality agreements in discrimination cases. The Guidance is non-statutory and much of its content is expressed to be ‘good practice’ rather than setting out legal requirements. Key recommendations include that in most cases employers should not use confidentiality agreements to stop a worker discussing an act of discrimination, that employers should pay for a worker to receive independent advice (including covering the adviser negotiating changes to the agreement if necessary) even if the worker ultimately chooses not to sign, and that the use of a confidentiality agreement should be signed off by a director or appropriate delegated senior manager. Continue reading
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.
New provisions regulating workplace harassment and bullying set out in South Korea’s amended Labour Standards Act (the “LSA“) were recently implemented on 16 July 2019. Employers should ensure that their internal policies are in line with these changes. Continue reading
In May 2019, a draft amendment to the current Vietnamese labour code (the “Draft No 2“) was submitted to the National Assembly, pending approval in November 2019. If passed, the Draft No 2 would replace the current Labour Code No 10/2012/QH13 (the “Labour Code“). Major changes proposed in the Draft No 2 are explained below.
The South Korean National Assembly recently passed legislation requiring employers to tackle workplace bullying and harassment. The amendments to the Labor Standards Act and the Industrial Accident Compensation Insurance Act dealing with Work Rules, penalties and handling bullying or harassment incidents will take effect on 29 May 2019.
Several important employment law reforms have come into force recently or will come into force shortly, both at the EU and French level. Below are some of the changes to expect for 2019:
Further to its response to the Women and Equalities Select Committee report last December (see here), the Government is consulting until 29 April 2019 on proposals to regulate confidentiality clauses (commonly referred to as “NDAs” or non-disclosure agreements) in employment contracts and settlement agreements. The Government has rejected calls to ban the use of such clauses in harassment and discrimination cases, but instead proposes:
- clarifying in law that no provision in an employment contract or settlement agreement can prevent someone making “any kind of disclosure to the police … whatever the issue or disclosure, regardless of whether it meets any legislative whistleblowing tests”. The consultation asks whether this should be extended to disclosures to any other persons, and whether any other limitations should be imposed.
- requiring a clear, written description of rights to be given to the employee before anything is signed, to be included in confidentiality clauses in employment contracts or within a settlement agreement. The Government does not feel that a prescribed form of wording is helpful, as it could quickly become out of date, but suggests legislation that requires confidentiality clauses to make clear that they cannot prevent whistleblowing disclosures, reporting of criminal offences, discussing any matter with the police, or highlighting other relevant statutory obligations such as disclosing information to a court. In relation to employment contracts, the confidentiality provisions and limitations on them should be summarised in the written statement of particulars (and would be subject to the current enforcement provisions allowing tribunals to increase compensation awards by 2 to 4 weeks’ pay if other claims are brought successfully). A confidentiality clause in a settlement agreement that does not meet the new wording requirement would be void in its entirety.
- in relation to settlement agreements, extending the requirement for the employee to receive independent advice so that, for the settlement agreement to be valid, the advice must cover the nature and limits of any confidentiality clauses in the settlement agreement and the disclosures a worker is still able to make.
The Government is not proposing making it a criminal offence to propose a confidentiality clause designed to prevent whistleblowing or reporting of a criminal offence given the difficulties of enforcement. Equally, there is no mention of any proposal to require businesses to notify the use of settlement agreements with non-disclosure provisions to some form of regulator. The consultation document is here.
The proposals go slightly further than the SRA warning notice and Law Society guidance issued earlier this year, in particular in suggesting that any confidentiality clause should expressly permit discussing any issue with the police and requiring independent advice on a settlement agreement specifically to cover the scope of the confidentiality clause. Pending the outcome of the consultation, it would be prudent to update existing template settlement agreements to comply with current best practice as set out in the SRA/Law Society guidance, in particular to make clear what types of disclosure remain permitted notwithstanding the confidentiality agreement.
Having an express carve-out for permitted disclosures will become critical should the proposals be adopted, as a failure to do so would prevent an employer from enforcing the confidentiality provision in its entirety. Employers would also need to consider revisions to confidentiality clauses in employment contracts and written statements of particulars – the consultation does not address to what extent it will be necessary to amend these for the existing workforce or whether the obligation will only arise if an existing employee requests a new statement or is issued with a new statement due to some other change in terms. Employers could also face demands for a higher contribution to an employee’s legal fees on a negotiated settlement given the greater extent of the required independent advice.
The appropriate use of confidentiality agreements in the employment context has come under a lot of scrutiny given the #MeToo campaign; a recent case illustrates how the courts may approach the issue of enforceability.
In Linklaters LLP v Mellish, Linklaters was granted a temporary injunction to restrain the defendant, its ex-global director of business development, from disclosing certain confidential information obtained from, and relating to, his employment, which Linklaters contended was confidential information relating to partners and/or employees of the firm and protected by express duties of confidence owed to it by the defendant, pursuant to his contract of employment. (Linklaters did not seek to restrain the defendant from publicising in general terms his ‘impressions of the current culture at Linklaters’.)
Following the termination of his employment, the defendant had indicated that he would give interviews concerning the ‘current culture’ at Linklaters in respect of women in the workplace, as demonstrated by three specific incidents. The Queen’s Bench Division held that there was clear evidence of a threat or intention to give interviews for publication about matters that had come to the defendant’s attention in the course of his employment, that the likelihood that Linklaters would succeed at a trial was sufficient to justify injunctive relief and that the rights of the third parties involved (in particular, employees and ex-employees who had raised grievances with an expectation of confidentiality) bolstered the case in favour of granting an injunction.
The right approach for the court to take, when faced with a contest between public interest considerations and a contractual duty of confidence, was to ask itself not just whether the information was matter of public interest, but whether, in all the circumstances, it was in the public interest that the duty of confidence should be breached. While there may be a legitimate public interest in firms performing their moral and social duties to their staff, this did not override the legitimate interest in maintaining confidentiality. There might be cases in which the details of individual acts of alleged or establish misconduct, combined with one another, created a compelling picture of persistent or habitual wrongdoing, serious enough to satisfy the relevant tests. In some cases, the public interest in correcting misleading public statements could come into the picture. However, there was no such evidence in this case.
South Korea continues to overhaul its labour and employment landscape. We look at some upcoming changes to the notice of dismissal provisions and the prohibition of workplace harassment rules – both effective this year.
The Government has today published its response to the Women and Equalities Select Committee report published in July of this year (see our blog post here) on sexual harassment at work. It has noted the lack of data and research on this issue, as highlighted by the Committee, and therefore, for the most part, its response is to consult and collect more data in order to identify the most effective interventions. However, it has agreed with the Committee that a new statutory Code of Practice should be introduced, to be developed by the Equalities and Human Rights Commission (EHRC).