The Evolving Regulation of Non-Disclosure Agreements in UK Employment Law

The legal and political climate surrounding non-disclosure agreements (NDAs) in the United Kingdom is undergoing significant change. Once viewed as a pragmatic mechanism for resolving disputes and protecting reputational interests, NDAs, particularly in the context of harassment and discrimination, are now the subject of legislative reform. The proposed amendments to the Employment Rights Bill (ERB) will materially alter the enforceability and permissible scope of confidentiality clauses in employment and related agreements.

This article examines the background and key aims of the reform, its impact on employers, and the steps they can take to prepare.

Background

The UK is undergoing a notable shift in its stance on NDAs. Recent reforms, including the ERB, changes to the Victims and Prisoners Act 2024, and new restrictions (already in force) on NDAs in higher education highlight a growing commitment to transparency and the protection of individuals’ rights to speak out. These changes mark a clear move away from using NDAs to silence victims or suppress complaints.

In the employment context, NDAs are generally used by employers to protect confidential information and are often included in employment contracts to expand on an employee’s limited, implied duties of confidentiality to ensure that the employer has adequate protection for its sensitive commercial information both during employment and afterwards. NDAs and confidentiality clauses are also frequently included in settlement agreements entered into between employers and employees on termination of employment to prevent disclosure of the fact or existence of the settlement and the disclosure of information about the circumstances leading to the settlement.  

The call for NDA reform has been long-standing, with critics emphasising the potential for such agreements to operate as tools of silence in matters of serious misconduct. The recent #metoo campaign cast a light on this issue and highlighted many situations where NDAs had been used inappropriately as a way of deterring victims of sexual harassment from disclosing details of their harassment to authorities.

Over the past few years, there has been a movement towards legislating for stricter regulation of NDAs but this picked up pace with the ERB’s passage through the House of Commons, with Layla Moran MP advancing an amendment designed to render void any contractual term preventing a worker from disclosing information about harassment, as it applies to protected characteristics under the Equality Act 2010.

Debate in April 2025 sought to broaden the NDA reform agenda further to harassment, discrimination and abuse more generally, unless the victim expressly sought confidentiality. This proposal was not accepted but the government confirmed that it recognised the appetite for legislative action and was “actively looking at all options.”

Proposed Employment Rights Bill Amendments

Government amendments to the ERB published on 7 July 2025 subsequently clarified the intended approach. A new clause 22 would render void any contractual provision which purports to preclude a worker from making an allegation of, or disclosing information relating to, relevant harassment or discrimination, or the employer’s response thereto. This drafting is intended to ensure that restrictions will apply not only to the underlying conduct but also to any disclosure concerning the way in which the employer investigates or addresses the matter. The scope of the protection covers both current and former workers but can also be extended by regulations to include contractors, trainees and individuals on work experience.

In terms of the type of harassment covered, the legislation refers to “relevant” harassment or discrimination.  In this context, relevant harassment/discrimination will mean conduct perpetrated either by the employer or another of its workers, and where the alleged victim is the complainant or a colleague.  It will cover all types of harassment and discrimination under the Equality Act 2010, save for failures to make reasonable adjustments or to victimisation (although an employer’s victimising response to a protected allegation would fall within scope).

The amendments proposed will allow for ‘excepted agreements’ to fall outside the scope of the provisions. However, it is not yet certain what type of agreement will be an ‘exception’. The government have suggested that the type of settlement agreement commonly used to terminate employment or settle employment disputes will not be ‘excepted’ and will be subject to NDA restrictions but may be ‘excepted’ if requested by the employee. The position is currently unclear, and we await further guidance on this issue.

As changes to NDA rules were not previously part of the ERB, the roadmap is silent on whether there will be any consultation, or when these measures will come into effect.

Practical Consequences for Employers

These reforms signal a decisive policy shift away from contractual restrictions on victim disclosures in cases of harassment, discrimination, and criminal conduct. The effect will be to limit substantially the confidentiality protections that employers have traditionally sought in settlement agreements and other workplace arrangements. The extension of protection to disclosures about an employer’s handling of complaints represents a significant broadening of scope and will require a more cautious and transparent approach to internal investigations.

While the reforms are framed as empowering victims and enhancing accountability, they may also reduce the incentive for parties to resolve disputes through negotiated settlement where confidentiality cannot be assured. NDAs have traditionally served as a central tool for resolving disputes, particularly those involving harassment, discrimination, or whistleblowing. By embedding confidentiality provisions within settlement agreements, employers were able to secure reputational protection while employees received compensation without the stress and publicity of litigation. Amendments that restrict the scope of confidentiality, however, weaken this mutual incentive.

The reduced ability to guarantee confidentiality is likely to diminish the appetite for early settlement. Employers may view settlements as less attractive if they cannot eliminate the risk of reputational damage. Greater recourse to litigation brings higher legal costs for both parties, increased demands on tribunal resources, and heightened publicity and reputational risks for employers.

In the longer term, however, reforms may encourage a cultural shift. Employers, unable to rely on NDAs as a safety net, may invest more heavily in prevention through better workplace culture, stronger HR processes, and transparent accountability mechanisms. While the transitional period may be marked by an increase in litigation and reputational battles, the ultimate policy aim is to foster safer, more accountable workplaces where NDAs are no longer a means of concealing wrongdoing.

What Employers can do to Prepare

To prepare for these amendments, it would be advisable for employers to commence a review of their standard contractual provisions and template agreements, ensuring alignment with the forthcoming statutory framework. They may wish to focus more heavily on prevention through better workplace culture, stronger HR processes, transparent accountability mechanisms, and internal guidance for HR, legal, and managerial staff to reflect the expanded categories of permitted disclosures and to ensure consistency with regulatory expectations, including the Solicitors Regulation Authority’s warning notice on the use of NDAs.

Conclusion

The coming months, particularly as the ERB continues its parliamentary journey, will be critical in determining the ultimate scope and practical impact of these measures. What is already clear is that the traditional balance between the right to speak and the desire to settle privately is being recalibrated.

Contact Us

If you require further advice and assistance in relation to any of the matters raised above, please contact Prettys Employment Team on 01473 232121 or you can contact Vanessa Bell at vbell@prettys.co.uk

You can also view our other employment law services here.