197: Government responds to consultation on the misuse of confidentiality clauses in harassment and discrimination cases

The government has published its response to the consultation on proposals to address the misuse of confidentiality clauses which was issued in March 2019 by The Department for Business, Energy and Industrial Strategy (BEIS). This emphasises that confidentiality clauses can serve a legitimate purpose in employment contracts and settlement agreements, but that using them to intimidate victims or prevent them from speaking out will be prohibited. There is also concern that in some cases, they perpetuate an unacceptable workplace culture and repeat offending.

Key commitments made by the government include:

• new legislation to ensure that confidentiality clauses in employment contracts and settlement agreements cannot be used to prevent individuals from making a disclosure to police, regulated health and care professionals or legal professionals, but not including counsellors and therapists;
• new legislation to require confidentiality clauses in settlement agreements to clearly set out their limitations and be specific about the information that can be shared and with whom;
• new legislation to require the mandatory independent legal advice on a settlement agreement to include the nature and limitations of any confidentiality clause;
• new legislation to require the limitations of any confidentiality clause in employment contracts to be added to the list of written particulars that must be given to all employees;
• new guidance from the Equality and Human Rights Commission, the Solicitors Regulation Authority and Acas to clarify both the law and good practice; and
• focus on preventing discrimination and harassment in the workplace.

The precise enforcement measures for confidentiality clauses that do not meet the new requirements have not yet been clarified, but it appears that they would be void in their entirety, without voiding the whole settlement agreement.

The government has decided not to introduce standard wording for confidentiality clauses, or to implement a reporting duty on complaints and settlement agreements.

No timescale is given for these changes, although the response states that the new legislation will be brought forward when Parliamentary time allows. In the meantime, it is recommended that all employers review their standard confidentiality clauses in employment contracts and settlement agreements to ensure the wording is appropriate and that they are being used properly.