Non-Disclosure Agreements
As part of the Government’s drive to promote a safe place of work and equality in the workplace, the Government has introduced a new clause 22A of the Employment Rights Bill (ERB), relating to the enforcement of confidentiality clauses in an employment agreement previously referred to as Compromise Agreement or a Settlement Agreement.
The aim of the new clause is to make void an agreement which seeks to gag a worker from making a disclosure in relation to allegations of harassment or discrimination which are defined in the Equality Act 2020. Regulations will be introduced to ensure that current and former employees and also workers who may have experienced sexual harassment or discriminatory conduct are not prevented from raising their concerns about their treatment. The Regulations will be wide ranging so that they extend to not just employees but can also include contractors and those on work experience.
The new provisions are in keeping with other aspects of the ERB and are consistent with the preventative duty to prevent harassment under section 40A of the Equality Act 2010, which places a duty on employers, to ensure that specific steps are taken where there is evidence to show action is needed to prevent sexual harassment.
The Government considers that these changes are necessary based on statistics obtained from the Office for National Statistics (ONS), its data showed that for the year ending March 2024, 21.8% of people aged 16 years and over, claimed they had experienced sexual harassment in-person in the last 12 months at their place of work.
The intention in the ERB’s new clause is to render void any provision in a contract between an employer and a worker, which attempts to prevent the worker from making allegations or disclosures about harassment or discrimination, it introduces a new era in employment law. NDA’s were a standard component of settlement agreements which employers relied on to ensure that allegations which could have a negative effect on a brands reputation were suppressed.
In future any clause attempting to silence workers about sexual misconduct related to harassment and discrimination will be unenforceable. The protection applies whether the alleged discrimination is by the employer, a person who is employed or engaged by the employer such as another worker, or a third party.
The introduction of these provisions could mean that employers may be less willing to settle discrimination and harassment claims, which may lead to more litigation in a court system which is already overburdened.
Reasonable Steps
The Worker Protection (Amendment to the Equality Act 2010) Act 2023 came into force on 26 October 2024. This introduced a legal duty on employers to take “reasonable steps” to prevent sexual harassment of their employees. The ERB will amend the duty to require employers to take “all reasonable steps” to prevent sexual harassment of their employees. The Equality Act 2010 does not state which steps an employer should take which are reasonable to prevent sexual harassment.
The ERB’s new section introduced into the Equality Act 2010 is entitled ‘Prevention of sexual harassment: power to specify “reasonable steps”’.
A list of obligations will set out what are regarded as the reasonable steps an employer must take in order to prevent workplace sexual harassment. Where the obligation arises employers must take the designated steps whilst also taking all other preventative steps that are reasonable in the particular circumstances. What constitutes “all reasonable steps” will depend on the specific circumstances of the employer, such as their size, sector and other relevant facts.
The steps that may be specified in Regulations include:
- conducting risk assessments;
- publishing plans or anti-harassment policies;
- introducing steps relating to the reporting of sexual harassment;
- introducing steps how to manage complaints;
- engaging and training staff;
- ensuring an effective reporting and complaints system are in place;
- evaluating the steps taken on an ongoing basis.
Third party Harassment
The ERB proposes to implement Regulations to ensure workplaces and working conditions are free from harassment, to protect employees from third-party harassment. The Government hopes that by introducing explicit protections from third-party harassment it will ensure that victims can be confident that they have recourse to legal redress if their employer has not taken ‘all reasonable steps’ to protect them, including treating someone less favourably because they submitted to or rejected sexual harassment or harassment in relation to sex or gender reassignment.
Harassment by third parties (such as by clients or customers), whether related to sex or any other protected characteristic, is not currently prohibited under the Equality Act 2010. Harassment involves being subjected to unwanted conduct which has the purpose or effect of violating the employee’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment. An employer will be deemed to have permitted a third party to harass an employee where the employee has been harassed in the course of their employment and it is shown that the employer failed to take all reasonable steps to prevent the third party from harassing them.
The Office for National Statistics (ONS) confirms across both sexual and non-sexual harassment, women were more likely to be harassed by a third party than men. For the year ending March 2024, 8.2% of women who claimed they had been harassed in the last 12 months reported that they were harassed by a client or member of the public through their work.
Freedom of speech will not be adversely affected by these provisions, Article 10 of the European Convention of Human Rights continues to apply. There is a reliance on the courts and tribunals to balance competing rights, including the freedom of expression when determining the effect of unwanted conduct under the Equality Act.
Individuals will be able to bring a claim against their employer to an Employment Tribunal, in addition the EHRC may also use its enforcement powers to take action. Conduct that is trivial or causes minor offence will not be sufficiently serious to meet the definition of harassment.
Tribunal proceedings
In the event a worker brings such a claim to an employment tribunal and where an employment tribunal has found that sexual harassment has occurred, it may order the employer to pay compensation, it must also then consider whether the employer has taken all reasonable steps to prevent the harassment; and if not, the tribunal may order an uplift in the compensation payable to the employee.
In addition a breach of the duty is also enforceable by the Equality and Human Rights Commission (EHRC), under its existing enforcement powers. The EHRC has recently updated their technical guidance on sexual harassment and harassment in the workplace to reflect the upcoming changes to support employers with the new preventative duty.
Defences
Employers have a legal defence to employer liability claims, including for third party harassment, under section 109 of the Equality Act 2010 if they can show that they took “all reasonable steps” to prevent their employees from acting unlawfully. This will include a consideration of:
- What steps were taken?
- Were there any further steps that were reasonably practicable that should have been taken and could have been taken by the employer?
Employers will not be penalised for failing to anticipate the unforeseeable or take other impractical steps. Instead, employers simply need to do what is reasonable. Therefore, employers cannot and are not expected to, police or control every action of third parties.
This will be taken account of by the employment tribunal when considering the facts of the case.
Employers simply need to do what is reasonable; for example, they should consider the nature of any contact with third parties, including the type of third party, frequency and environment.
Employers will have to consider their liability for workplace harassment, which is a genuine issue and not to be underplayed, particularly as in certain sectors or in certain roles there may be more regular worker interaction with third party contractors, suppliers, customers, or other members of the public than others.
The Government’s consultation in relation to the employer duty to take ‘all reasonable steps’ to prevent sexual harassment will commence in 2025 and continue into to October 2026.
If you are interested in discussing anything in this article, please contact our Employment Law team on 01603 677077 or email info@spiresolicitors.co.uk.
