The use of non-disclosure agreements (NDAs) and other so-called gagging orders to stop workers reporting crimes, harassment or discrimination are to face new legal curbs, the government has announced.
The proposed crackdown will clarify that confidentiality clauses, including those which involve cash payouts, cannot prevent whistleblowers from speaking to the police or disclosing information in any criminal proceedings.
Prime Minister Theresa May says the shift sends a “clear message” following several high profile cases involving NDAs.
One of the most recent involved Sir Philip Green, the Topshop billionaire, after the Daily Telegraph became the subject of an injunction which he later lifted.
The paper reported that five of the tycoon’s staff signed NDAs to allegedly keep complaints quiet, with one being paid more than £1m.
Sir Philip insists his behaviour did not amount to criminal or gross misconduct.
The use of gagging orders in contracts is widespread to protect legitimate business information and interests but they were banned in the NHS in 2013 for fear bad practices would go unidentified.
The government said the new rules would, for the first time, introduce a clear, written description of rights before anything is signed in confidentiality clauses in employment contracts or within a settlement agreement.
They would also ensure a worker who signs up to a settlement agreement receives independent advice which must cover the limits of any confidentiality clauses.
The government said the aim of the rules was to stop potential victims from being silenced.
Mrs May said: “Sexual harassment is against the law and discrimination of any kind will not be tolerated – in the home, the workplace or in public.
“Over the past couple of years, we have seen brave individuals breaking silence on such behaviour, but too many are still facing the unethical misuse of non-disclosure agreements by their employers.
“We’re sending a clear message that a change in the law is needed to ensure workers are able to come forward, be aware of their rights and receive the advice they need before signing up to them.”