Is there still a place for Non-Disclosure Agreements (NDAs)?
Simply put, yes – they offer value for employers and employees.
NDAs, or confidentiality clauses as they are better known in the UK, are widely used in employment contracts and settlement agreements to ensure the protection of confidential and sensitive information. They are also used to enable employers and employees to move on when a working relationship has broken down, in the knowledge that neither party can discuss details of the complaints raised, often by both sides.
It is the use of NDAs to prevent disclosure of alleged illegality and serious wrongdoing that continues to get press attention, particularly where some victims of workplace harassment have reportedly been intimidated into silence.
The problem the government is currently trying to solve, even in their own estimation, relates to a “very small minority” of “unethical” employers. Whilst it is clearly important to address the issue, the knock on effect may unintentionally prove damaging for some claimants and prevent parties from settling disputes which both would prefer to resolve.
The proposals in the consultation document issued on Monday (which closes on 29 April 2019) will impact both employment contracts and settlement agreements. The key issues being consulted on are:
- Whether to formally legislate to the effect that no provision in an employment contract, or settlement agreement, can prevent someone from making a disclosure to the police.
- Whether all confidentiality clauses in settlement agreements and contracts, should be required to highlight their limits, and what disclosures are not precluded.
- Whether the independent advice which the employee receives when entering into a settlement agreement should be specifically required to cover the nature and limitations of any confidentiality clause and the disclosures that the individual is still permitted to make.
- Whether to render void any confidentiality clause in a settlement agreement that does not meet the new requirement.
Any changes that may arise from this consultation process will still be some way off. However, those employers who routinely use broad confidentiality provisions in their settlement agreements will need to rethink their approach and whether they are receiving value for the compensation they have agreed to pay. Solicitors working in-house and in private practice may also face disciplinary action if involved in the inappropriate use of NDAs, even when acting in the best interests of their clients.
The unintended consequence of regulating the use of NDAs may be that employers who no longer feel they can have the full protection of confidentiality may be less inclined to settle, resulting in claims escalating. This will mean that more claimants have to pursue their claims through the courts – a daunting prospect for many who may be deterred from making a claim at all as a result. However the government decide to proceed, they should not forget that confidentiality clauses often benefit both parties – the lurid headlines only tell a very small part of the whole story.
For more information, please contact Trevor Bettany.
Sponsor Licence Compliance: Key considerations & how to be audit ready
Join us for the third in our series of mini webinars on post Brexit immigration about sponsor licence compliance.
COVID-19 Vaccination – can an employer make it compulsory for employees?
We review what legal issues to take into account when considering to make vaccination compulsory as an employer.
Linking ESG and Executive Pay
How does a business go about embedding a focus on strong ESG performance into the structures and culture of its organisation?
Amelia Goodwin and Georgina O'Sullivan write for Pharmacy Business on managing employee performance
Why contractors should prioritise performance management of employees as a regular feature of their business strategy.
The UK’s New Skilled Worker & Intra-Company Visa Routes: a closer look
Taking a closer look at the UK’s new visas to assist UK businesses.
Have your say: MAC call for evidence on Intra-Company Visa Route
The MAC, has launched a call for evidence on the Intra-Company Transfer (ICT) immigration route.
Sleep-in workers not entitled to NMW for entire shift
A unanimous ruling by The Supreme Court in the Royal Mencap v Tomlinson-Blake and another case.
Amelia Goodwin quoted by People Management, Home Care Insight and Care Home Management on the implications of the Supreme Court's ruling in Royal Mencap Society v Tomlinson-Blake
The court found that care providers do not have to pay the minimum wage to staff for time that they are asleep but on call during shifts.
It’s all about the data…why has the government delayed hospitality reopening again?
Michael Powner quoted by People Management on the implications of Uber's decision to pay drivers minimum wage
Uber’s rollout of living wage will put further pressure on other gig economy firms to follow suit.
Rose Carey, Kelvin Tanner and Kate Gamester write for Compliance & Risk on navigating the UK's new immigration system
The article highlights the compliance pitfalls and how organisations can adapt to avoid them.
The UK’s post-Brexit rules for skilled workers – Key implications for the construction industry
As a result of the new Points Based Immigration System , UK companies in the construction sector will not be able to sponsor labourers.
How to manage redundancies: employee rights on redundancy
What rights do employees have when a redundancy exercise is carried out?
Michael Powner quoted by Personnel Today on the implications of the Uber Supreme Court ruling on the gig economy
While the case is fact specific, the decision is likely to be a very persuasive authority for tribunals ruling on others in the gig economy.
Michael Powner quoted by Bloomberg, PA Media and People Management on the Supreme Court's ruling on the employment status of Uber drivers
The Supreme Court unanimously found that Uber drivers are workers under UK law.
Nick Hurley quoted by the Daily Mirror on 'no jab, no job' policies
'No jab, no job' may seem clear and concise, but mandatory policies requiring the Covid-19 vaccine are far from straightforward.
How to manage redundancies: practical steps
What are the practical considerations when carrying out a redundancy exercise?
EMI share options, Covid-19, and Brexit – where are we now?
What are the new measures to employers operating EMI schemes that have been affected by the pandemic?
How to manage redundancies: initial planning
What should employers consider when preparing for a redundancy situation?
Post-Brexit Implications for UK/EU Business Travel
How companies need to monitor the activities of their employees on business trips in a post-Brexit world.