Maria Miller, chair of the Women and Equalities Committee, said the government needs to clarify the rules on whistleblowing and tackle the financial barriers employees face when trying to take cases to employment tribunals.
The report said difficulties in pursuing claims through employment tribunals meant staff often felt they had little choice but to reach a confidential settlement prohibiting them from speaking out. More than 90 people wrote to the committee sharing their experiences.
Miller said it was "worrying" that gagging clauses are being traded by employers for job references. "After signing an NDA many individuals find it difficult to work in the same sector again," she said.
"Some suffer emotional and psychological damage as a result of their experiences, which can affect their ability to work and move on."
The committee said that any use of confidentiality clauses needs to be clear and specific in scope and that employers should be made to investigate all harassment allegations properly regardless of whether a settlement is reached.
It added that a senior director should be nominated at firms to oversee discrimination cases so that someone is held accountable.
It also renewed calls for the three-month time limit (from the date of the alleged offence) to take sexual harassment and discrimination claims to tribunal to be doubled, and said that new laws should be introduced so that NDAs cannot prevent people from sharing information that may support the claims of other victims.
The report also called for legislation requiring employers to provide, as a minimum, a basic reference for any former employee confirming they worked for that employer and the dates of their employment.
Further reading
Hancock's NHS NDA ban announcement "strange"
Why proposed NDA reform helps employers
Time's up on sexual harassment in the workplace
Astrophysicist Emma Chapman won a payout after being sexually harassed by a man at University College London but refused to sign an NDA in favour of a confidentiality waiver. She said the Women and Equalities Committee report was a positive first step towards "breaking the cycle of abuse and silencing in sexual misconduct [cases]" at universities in particular.
She told MPs that she knew of two cases in London in the past five years where settlements totalling more than £100,000 were given to multiple victims of individual harassers.
But she said she was "concerned that even with the clearest terms alongside an NDA the power imbalance between employer and employee will still serve to silence without explicit confidentiality waivers".
Ben Willmott, head of public policy at the CIPD, said that the body welcomed the recommendations: “The committee rightly recognises the need to strike a balance in reforming the use of NDAs so they cannot be used to gag victims from speaking out about allegations of discrimination or harassment, while still protecting the rights of victims to be able to make the choice to move on with their lives," he said.
“In particular the CIPD supports the recommendations to strengthen corporate governance requirements around the use of NDAs. For example, by requiring a named senior director to oversee anti-discrimination and harassment policies and procedures and the use of NDAs in discrimination and harassment cases."
Julie Morris, a senior employment lawyer at Slater and Gordon who presented evidence as part of the inquiry, said that she supported the views of the committee and that banning NDAs entirely would be counterproductive: “We support the recommendations of the committee wholeheartedly and believe they should be implemented as a matter of urgency. Banning NDAs entirely is not the best way forward as there are situations where they are the best action for all parties.
“But there is no doubt that sometimes employers have used them unscrupulously in a bid to pressure victims from exposing illegal behaviour. There is a great deal of stress and financial burden involved in taking a claim to tribunal so often employees can feel backed into a corner and coerced into signing one.”
She added that legislative reform should hopefully spur cultural change: “If a more reasonable and robust position is adopted by employers it will evoke a shift in culture so that settlements without an NDA become commonplace, and therefore it will be seen as more acceptable for someone to raise a complaint of harassment or discrimination. In turn this will eliminate the risk of negatively affecting an employee’s future career."
Morris added that she too backed the recommendation to oblige companies to nominate a senior director to oversee anti-discrimination and harassment policies: “Forcing directors to take responsibility for analysing how discrimination and harassment complaints within their organisation are managed should ensure they are properly investigated and resolved, and that repeat offences and cultural problems are not being covered up by the use of NDAs.”
However, TUC general secretary Frances O’Grady said the recommendations don't go far enough and that the government must change the law around NDAs to protect workers: “More than half of women in the UK have been sexually harassed at work. Sexual harassment has a huge impact on women’s careers and lives so the Committee is right to call for radical change,” she said.
“Small tweaks to non-disclosure agreements won’t cut it. The government must change the law to put the responsibility for preventing harassment on employers, not victims. This would shift the burden of tackling sexual harassment away from the victims. And it would help end toxic workplace cultures that silence those who’ve been harassed.
“Anyone experiencing sexual harassment at work should join a union to make sure they are protected and respected at work.”
