· News

Legislation on non-disclosure agreements to change

?New proposals to prevent employers from using gagging clauses to cover up wrongdoing have been put forward

The plans, to be included in a consultation, could lead to new legislation that would prevent non-disclosure agreements (NDAs) being used to prevent victims reporting serious complaints to the police.

Ministers decided to act following high-profile cases where NDAs have been used by some employers to conceal sexual harassment, threats and racism. Philip Green, chairman of the Arcadia Group, recently used NDAs to prevent several former employees from speaking out about bullying and sexual assault.

The proposals are intended to end the unethical use of NDAs. This would involve clarifying the law that confidentiality clauses cannot prevent people from speaking to the police and reporting a crime, requiring a written description of a person’s rights before an NDA is signed, and access to independent advice so a worker is not confused into signing a gagging clause they are unaware of.

Evidence of the misuse of NDAs includes where employers suggest that a worker can't blow the whistle, despite the fact that no provision can remove a worker’s whistleblowing rights. In addition, through an NDA or settlement agreement, employers could insist that a worker is unable to discuss an issue with other people or organisations, such as the police, a doctor or a therapist. This can leave victims afraid to report an incident or speak out about their experiences, leaving others exposed to similar situations, and putting customers and other businesses at risk.

Business minister Kelly Tolhurst said: “Many businesses use non-disclosure agreements and other confidentiality agreements for legitimate business reasons, such as to protect confidential information.

"What is completely unacceptable is the misuse of these agreements to silence victims, and there is increasing evidence that this is becoming more widespread. Our new proposals will help to tackle this problem by making it clear in law that victims cannot be prevented from speaking to the police or reporting a crime and clarifying their rights.

"They will also help boost understanding of workplace rights and legal responsibilities, all part of plans to create a fairer workplace through our modern industrial strategy," she said.

Harry Fletcher, a victims rights campaigner, told The Telegraph that more detail was needed on the proposals: "This is welcome but the the government needs to be more explicit and explain what category of offences this covers.

“It is important that anyone who is the victim of sexual, physical or psychological abuse cannot be bought off by an employer and can have the confidence to come forward and report the abuse. Victims of serious crime also need to have an advocate to help them through the system and explain to them what their rights are.”

The announcement coincided with the news that the founder and chief executive of fashion chain Ted Baker, Ray Kelvin, has resigned following allegations of misconduct, including "forced hugging". Kelvin had been on a voluntary leave of absence since December following the allegations.

Richard Fox, head of employment at Kingsley Napley, said that the new legislation on NDAs represents a wider shift on attitudes to sexual harassment: “If anyone were in any doubt that over the last 18 months we have undergone a revolution in terms of the way in which sexual harassment is dealt with in the workplace, the announcement of the resignation of the CEO of Ted Baker surely confirms it," he said. “However senior you are in an organisation (and Ray Kelvin was not only the chief executive but he also founded the company), you can be ousted if you step out of line.

Fox suggested this cultural shift might have more meaningful impact than legislative change. "Law change of this sort is brought about by the introduction of a new statute or set of regulations (as with disability, age and sexual orientation for example), but with sexual harassment that has not been necessary. All companies and those who own and manage them now have to take on board this new environment and ensure their behaviour, and importantly their reaction to bad behaviour, is commensurate with the new regime.”