The Employment Rights Act 2025 (“ERA 2025”) will provide that any provision in a non-disclosure agreement (“NDA”) which seeks to prevent a worker speaking out about harassment or discrimination will be void.

The timeframe for the reforms coming into force was previously unclear, however the government has now indicated that they will come into effect in 2027. In readiness for the change, the government has also launched a consultation (the “Consultation”) to inform the development of regulations that will restrict the use of NDAs in cases of workplace harassment and discrimination. 

Where are NDAs typically used and what are the proposed reforms?

NDAs are typically included in legally binding agreements which are used by employers and workers to resolve employment disputes, or where termination of a worker’s engagement is mutually agreed. These agreements are recorded as either a ‘settlement agreement’ (which is subject to statutory requirements) or an Acas conciliated COT3 agreement.

To prevent NDAs being used by employers to silence workers from speaking out on harassment complaints and other misconduct, section 25 ERA 2025 will render void any provision within an NDA which seeks to prevent a worker from speaking out about ‘relevant harassment or discrimination’ or the employer’s response to the allegation, or the making of the allegations. 

However, such provisions in NDAs will not be void where the agreement is an ‘excepted agreement’, with the conditions for an excepted agreement to be set out in regulations made by the Secretary of State. Regulations may also be made to specify which persons individuals who have entered an excepted agreement can make disclosures to, and whether the reforms will extend to those falling outside the definition of a ‘worker’ under the Employment Rights Act 1996.

The Consultation seeks views on these three issues and will run until 8 July 2026.

1. What conditions will need to be satisfied for an NDA to be an “excepted agreement”?

While the aim of the reforms is to protect workers against NDAs being used by employers to cover up relevant harassment and discrimination, the Consultation notes that the use of NDAs may sometimes be appropriate, such as where a worker wants to maintain confidentiality as part of a settlement agreement to bring closure to an unpleasant or distressing experience.

To strike the balance between giving workers the freedom to decide whether to enter into an NDA relating to harassment and discrimination, and ensuring that they are protected from coercion and sufficiently informed about what they are agreeing to, the Consultation proposes the following conditions will need to be satisfied for an agreement to be an excepted agreement: 

1.1 Worker to have received independent advice before entering into an excepted agreement

Before entering into an excepted agreement, workers must receive written advice from an independent legal adviser on the terms, effect and legal limitations of the NDA relating to relevant harassment or discrimination. The adviser must be named in the agreement and have indemnity insurance. This requirement will apply to both settlement agreements and COT3 agreements. 

While section 203 Employment Rights Act 1996 requires individuals to receive advice from a “relevant legal advisor” on the terms and effect of a settlement agreement, there is no such requirement for COT3 agreements. The Consultation proposes extending the definition of “relevant legal advisor” to include ACAS conciliators (who will not be required to hold indemnity insurance given individuals’ right to recourse against ACAS as a public body). 

Although the Consultation does not propose that employers cover the cost of independent legal advice, it notes that most employers already contribute to the cost of advice provided to ensure that a settlement agreement is legally valid, with it expected that the same approach will be taken in relation to excepted agreements. 

1.2 Worker to have expressed preference in writing to enter into an excepted agreement following receipt of independent advice 

A worker may only enter into an excepted agreement by providing written informed consent to their employer following receipt of independent legal advice. If the worker does not provide written consent to enter into an excepted agreement, provisions in the NDA seeking to prevent the worker from speaking out about relevant harassment or discrimination would be void.

The Consultation also seeks views on whether an employer should be able to suggest confidentiality provisions to an employee. Although a blanket prohibition preventing employers from suggesting confidentiality provisions would prevent employer misuse of NDAs, this could restrict appropriate use of NDAs, for example where workers may not be aware that a NDA is an option, without an employer raising it. 

1.3 Workers to be given right to withdraw from excepted agreement without penalty

Workers will be given an explicit right to withdraw from an excepted agreement without penalty within 14 days of the agreement being entered into (“cooling off period”). 

The Consultation however acknowledges that the introduction of a cooling off period could have wide-reaching consequences, including whether:

• an individual who withdraws from an excepted agreement during the cooling off period would also withdraw from any broader settlement agreement. Withdrawing from the excepted agreement alone would cause practical difficulties, given that it is often linked to the employer’s obligation to pay monies under the broader settlement agreement;
• an employee can waive the cooling off period in specific circumstances, such as where settlement is reached shortly before or during an employment tribunal hearing; and
• the cooling off period will impact the calculation of time limits within which a worker can bring an employment tribunal claim.

1.4 Written copy of excepted agreement to be provided to all parties

Written copies of excepted agreements are to be provided to all parties in an accessible format. This ensures workers can refer back to the agreement and check their understanding of specific circumstances and permitted disclosures covered by the agreement.

1.5 Excepted agreements unable to prevent workers speaking out about future harassment or discrimination

It would only be possible to enter into an excepted agreement if the incident of relevant harassment or discrimination has (or is alleged to have) already taken place. Such a requirement would prevent employers from using ‘pre-dispute’ NDAs to prevent workers from speaking out against harassment and discrimination that may occur in the future. 

The Consultation also proposes a ‘potential condition’ that excepted agreements should stipulate a time limit on confidentiality obligations, suggesting that either a fixed-term period or a time limit agreed by the parties after which confidentiality obligations will end could be utilised. 

2. Which individuals or bodies should an individual who has signed an excepted agreement be able to make disclosures to? 

The Consultation proposes that after entering into an excepted agreement, individuals should be permitted to make disclosures relating to relevant harassment and discrimination to the following individuals or bodies, irrespective of what the NDA says: 

• Law enforcement.
• A qualified lawyer or registered foreign lawyer. 
• Individuals entitled to practise a regulated profession (e.g. doctors or social workers) or a tax adviser.
• Individuals or organisations providing a service to support victims in relation to the effects of the relevant harassment or discrimination.
• Certain regulatory bodies.
• Individuals or organisations who advise on individuals’ employment rights, conciliation or mediation.
• Trade union representatives or trade union equality representatives.
• Close family members for the purpose of receiving support in respect of the relevant harassment and discrimination.

The Consultation also seeks views on whether disclosures should be permitted to wider family and friends or employers and recruiters to explain the reason for leaving previous employment.

3. Should the restriction on the use of NDAs in cases of workplace harassment be extended to apply to more than just workers? 

The Consultation seeks views on whether the prohibition on NDAs being used to silence individuals from speaking out on relevant harassment or discrimination should be extended to the wider groups of persons listed below who fall outside the definition of ‘worker’ under the Employment Rights Act 1996 “at some point in the future”. 

• agency workers; 
• secondment workers; 
• self-employed persons;
• individuals on a work experience placement; and
• certain NHS workers.

What does this mean for employers?

The Consultation is the first indication to employers of when ERA 2025 NDA reforms will take effect and the circumstances in which an NDA will still be permitted. While not imposing a blanket ban on the use of NDAs, the Consultation proposals (if confirmed) would introduce additional steps which must be satisfied before entering into settlement agreements and COT3s involving cases of harassment and discrimination. 

This will undoubtedly increase timeframes and create challenges, notably in cases where settlement is reached “at the door of the court” (especially if a cooling off period cannot be waived). Equally, employers may be less inclined to enter into a settlement agreement (particularly for commercial reasons where settlement is likely to be cheaper than litigation) unless it contains a binding NDA. However, such employers may be in difficulty meeting the requirements of an excepted agreement in circumstances where they are unable to suggest the possibility of an NDA. This in turn could result in increased tribunal litigation and indeed cost. 

We would encourage employers who regularly utilise settlement agreements, who will be well placed to identify any practical issues arising from the proposed regime, to consider engaging with the consultation before it closes on 8 July 2026. 

In the meantime, if you would like to discuss how our team of experienced employment lawyers can support your organisation, please get in touch.