Report on Proposed Amendments to the Employment Rights Bill Regarding Non-Disclosure Agreements (NDAs)

Introduction: Legislative Context and Sustainable Development Goals

Recent amendments to the Employment Rights Bill propose a comprehensive ban on the use of non-disclosure agreements (NDAs) in cases related to workplace harassment or discrimination. This legislative action is directly aligned with several United Nations Sustainable Development Goals (SDGs), particularly those concerning equality, decent work, and justice. While the government’s stated intention is to protect vulnerable workers, this report analyses the potential consequences of the proposed ban and its complex relationship with achieving these global goals.

The primary SDGs engaged by this legislation include:

• SDG 5: Gender Equality: By aiming to prevent the silencing of victims, many of whom are women facing sexual harassment, the law seeks to eliminate discrimination and violence against women.
• SDG 8: Decent Work and Economic Growth: The proposal impacts the right to a safe and secure working environment (Target 8.8) and the mechanisms for resolving workplace disputes.
• SDG 10: Reduced Inequalities: The ban addresses discrimination based on all protected characteristics, aiming to ensure equal opportunity and outcomes (Target 10.3).
• SDG 16: Peace, Justice and Strong Institutions: The legislation affects access to justice (Target 16.3) and the operational capacity of judicial bodies like Employment Tribunals (Target 16.6).

Analysis of the Proposed Legislative Changes

Government Rationale and Alignment with SDG 5 and SDG 10

The government’s initiative to ban NDAs in harassment and discrimination cases is framed as a measure to end the “appalling practice” of silencing victims. This objective strongly supports the ambitions of SDG 5 and SDG 10 by seeking to create more transparent and accountable workplaces where discriminatory behaviour is addressed rather than concealed. The intent is to empower workers, giving them the confidence that inappropriate conduct will be handled appropriately, thereby fostering a culture of equality and respect.

Scope of the Proposed Ban

The proposed amendment would render void any term within a contract that prohibits an employee from disclosing information or making allegations concerning harassment or discrimination. This applies broadly to:

1. All contracts, including standard employment contracts and settlement agreements.
2. All forms of harassment and discrimination covered by equality legislation, including those related to race, disability, gender, and other protected characteristics.

Potential Impacts on the Achievement of SDG 8 and SDG 16

Implications for Employee Welfare and Access to Justice (SDG 8 & SDG 16)

Despite its protective intent, the ban may have unintended negative consequences for employees, potentially undermining progress towards SDG 8 and SDG 16. A key concern is that the legislation removes the primary leverage an employee has in negotiating a private settlement. This could lead to several adverse outcomes:

• Reduced Access to Remedy: Many employees prefer a settlement payment to the stress, cost, and publicity of a tribunal hearing. Without the ability to offer confidentiality, employers may be unwilling to settle, forcing employees into litigation they may lack the emotional or financial resources to sustain. This could effectively deny them access to justice (SDG 16.3).
• Undermining Decent Work Principles: Forcing a victim through a protracted and public legal battle can be detrimental to their well-being and career prospects, conflicting with the principles of a safe and secure working environment as outlined in SDG 8.8.

Consequences for Employers and Workplace Resolution Mechanisms

Employers may adopt a “wait and see” approach rather than seeking early resolution. If an employee can accept a settlement and subsequently publicise the allegations, the incentive for the employer to settle is significantly diminished. This could delay proactive measures to address systemic issues, as employers may fear that taking remedial action before a case is resolved could be interpreted as an admission of liability. Such delays would hinder the goal of fostering safer and more inclusive workplaces (SDG 8.8).

Strain on Judicial Institutions (SDG 16)

A likely consequence of fewer settlements is an increase in claims proceeding to Employment Tribunals. Discrimination and harassment cases are often complex and lengthy, requiring significant judicial resources. An influx of such cases would place additional pressure on an already over-stretched system, leading to delays for all tribunal users. This outcome would challenge the objective of SDG 16.6 to build effective, accountable, and transparent institutions by potentially weakening the tribunal system’s overall efficacy.

Comparative Approaches and Legislative Uncertainty

The “Excepted Agreements” Clause and International Precedent

The draft legislation includes a provision for “excepted agreements,” though its intended application remains unclear. A potential model is the system used in Ireland, where NDAs are permissible under specific conditions that safeguard employee rights. These conditions typically include:

• The employee receiving independent legal advice at the employer’s expense before signing.
• A mandatory cooling-off period during which the employee can withdraw from the agreement.

Adopting a similar carve-out for settlement agreements in the UK could mitigate many of the identified risks to SDGs 8 and 16 by preserving a viable pathway for mutually agreeable resolutions. However, the government has not yet indicated an intention to create such a significant exception.

Conclusion: Balancing Protective Intent with Practical Efficacy

The proposed ban on NDAs is a well-intentioned effort to advance the principles of SDG 5 and SDG 10 by protecting victims of harassment and discrimination. However, this report concludes that, in its current form, the legislation risks creating practical barriers that could undermine the broader goals of SDG 8 (Decent Work) and SDG 16 (Justice and Strong Institutions). The lack of consultation on this late amendment raises concerns about its thoroughness. Achieving a legislative balance that empowers victims while preserving effective and accessible dispute resolution mechanisms is essential for making meaningful and sustainable progress in workplace rights.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 5: Gender Equality

• The article directly addresses the issue of sexual harassment in the workplace, a key barrier to gender equality. The proposed ban on non-disclosure agreements (NDAs) is specifically aimed at preventing the silencing of victims, many of whom are women. The text states the ban relates “not only to sexual harassment but to any alleged discriminatory conduct.”

SDG 8: Decent Work and Economic Growth

• The entire article is framed within the context of employment rights and workplace conditions. It discusses the “Employment Rights Bill” and its goal to protect workers. The core theme is promoting a safe and secure working environment by tackling harassment and discrimination, which aligns with the principles of decent work. The article mentions the goal is to give “millions of workers confidence that inappropriate behaviour in the workplace will be dealt with.”

SDG 10: Reduced Inequalities

• The article explicitly states that the proposed ban on NDAs covers discrimination based on protected characteristics. It gives the examples of allegations that an employee has “not been promoted or have been marginalised at work because of a disability or their race (or any other protected characteristic)”. This directly connects to the goal of reducing inequalities by ensuring equal opportunity and protection for all individuals in the workplace.

SDG 16: Peace, Justice and Strong Institutions

• The article discusses the legal framework (Employment Rights Bill) and the justice system (Employment Tribunals) responsible for handling workplace disputes. It analyzes how the proposed legislation would impact access to justice and the effectiveness of these institutions, noting concerns that it could lead to “more pressure on already over-stretched Employment Tribunals.” This relates to building effective, accountable, and inclusive institutions.

2. What specific targets under those SDGs can be identified based on the article’s content?

SDG 5: Gender Equality

1. Target 5.1: End all forms of discrimination against all women and girls everywhere. The article’s focus on banning NDAs for discrimination and harassment, including sexual harassment, is a direct legislative action aimed at ending a specific form of discrimination in the workplace.
2. Target 5.2: Eliminate all forms of violence against all women and girls in the public and private spheres. Workplace harassment is a form of violence and abuse. The government’s stated intention to end the “misuse of NDAs to silence victims of harassment” is a measure to address this issue within the private sphere of employment.

SDG 8: Decent Work and Economic Growth

1. Target 8.8: Protect labour rights and promote safe and secure working environments for all workers. The amendment to the Employment Rights Bill is a clear attempt to protect labour rights. The goal, as stated by the Employment Rights Minister, is to ensure “inappropriate behaviour in the workplace will be dealt with, not hidden,” thereby promoting a safer working environment.

SDG 10: Reduced Inequalities

1. Target 10.3: Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices and promoting appropriate legislation. The article discusses a legislative amendment designed to eliminate the practice of using NDAs to cover up discriminatory conduct related to “disability or…race (or any other protected characteristic)”. This is a direct example of promoting legislation to ensure equal opportunity.

SDG 16: Peace, Justice and Strong Institutions

1. Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all. The article examines how the ban on NDAs affects access to justice. While the intent is to help victims, the article questions whether it might inadvertently hinder justice by removing the leverage for settlements, potentially forcing victims into a “tribunal hearing” they may not have the “emotional and financial resources to follow.”
2. Target 16.B: Promote and enforce non-discriminatory laws and policies for sustainable development. The proposed amendment to the Employment Rights Bill is a non-discriminatory policy being enforced through national law. The entire article is a commentary on the promotion and potential consequences of this specific policy.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Indicators for SDG 5, 8, and 10

• Existence of legal frameworks to address workplace discrimination and harassment: The primary subject of the article is the amendment to the “Employment Rights Bill” to ban NDAs in harassment and discrimination cases. The successful passage and enforcement of this law would be a key indicator.
• Number of reported cases of workplace harassment and discrimination: The article implies this is a key metric. The government’s goal is to ensure “inappropriate behaviour in the workplace will be dealt with, not hidden.” An increase in formally addressed cases (as opposed to hidden ones) could indicate progress.

Indicators for SDG 16

• Number of employment dispute cases resolved through settlement agreements vs. formal tribunal hearings: The article strongly implies this ratio will change. It suggests that if the ban is enacted, fewer cases will settle, and more will go to tribunals because employers may “avoid reaching an agreement.” This can be measured to track the impact on the justice system.
• Average time to resolve employment disputes in tribunals: The article explicitly mentions a potential negative outcome that can be measured as an indicator. It warns that if more claims go to tribunals, “there will be more delays which will have an impact on all tribunal users.” This backlog and delay is a direct measure of the institution’s efficiency.

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article. In this table, list the Sustainable Development Goals (SDGs), their corresponding targets, and the specific indicators identified in the article.

Source: mondaq.com