MPs call for action to limit use of non-disclosure agreements
Victims of discrimination at work should not be impeded from achieving proper redress by the use of non-disclosure agreements (NDAs), a House of Commons committee said today.
In a major report into the use of NDAs, the Women & Equalities Committee condemns the routine cover-up of allegations of unlawful discrimination and harassment in the workplace, and the fact that some employers fail to investigate allegations of unlawful discrimination properly – or at all.
The MPs call on the UK Government to "address the failure of the employment tribunal system to ensure all employees who have experienced discrimination have a meaningful route of redress".
Their report highlights the difficulties of pursuing a case at employment tribunal and the substantial imbalance of power that can exist between employers and employees, which can drive employees to feel that they have little choice but to reach a settlement that prohibits them from speaking out.
Among their proposed solutions they believe the Government should:
- ensure that NDAs cannot prevent legitimate discussion of allegations of unlawful discrimination or harassment, and stop their use to cover up allegations of unlawful discrimination, while still protecting the rights of victims to be able to make the choice to move on with their lives;
- require standard, plain English confidentiality, non-derogatory and similar clauses where these are used in settlement agreements, and ensure that such clauses are suitably specific about what information can and cannot be shared and with whom;
- strengthen corporate governance requirements to require employers to meet their responsibilities to protect those they employ from discrimination and harassment; and
- require named senior managers at board level or similar to oversee anti-discrimination and harassment policies and procedures and the use of NDAs in discrimination and harassment cases.
The committee also renews its previous calls for the Government to:
- place a mandatory duty on employers to protect workers from harassment and victimisation in the workplace; and
- urgently improve the remedies that can be awarded by employment tribunals, as well as the costs regime, to reduce disincentives to taking a case forward. Tribunals should be able to award punitive damages, and awards for the non-financial impact of discrimination should be increased significantly.
Committee chair Maria Miller MP commented: "We heard during our previous inquiry into sexual harassment in the workplace that the current use of non-disclosure agreements in settling such allegations is at best murky and at worst a convenient vehicle for covering up unlawful activity with legally sanctioned secrecy.
"It is particularly worrying that secrecy about allegations of unlawful discrimination is being traded for things that employers should be providing as a matter of course, such as references and remedial action to tackle discrimination.
"After signing an NDA, many individuals find it difficult to work in the same sector again. Some suffer emotional and psychological damage as a result of their experiences, which can affect their ability to work and move on. There is also the financial penalty of losing a job and bringing a case against an employer.
"Organisations have a duty of care to provide a safe place of work for their staff, and that includes protection from unlawful discrimination."
She added: "Some organisations now routinely settle employment disputes without the use of NDAs. We have put forward a range of measures to ensure more follow suit."