A report by the Women and Equalities Committee has criticised the routine use of non-disclosure agreements (NDAs) by employers to cover up allegations of unlawful discrimination and harassment.

In particular, the Committee condemned employers for failing to investigate allegations of discrimination properly and, in some cases, relying on NDAs to avoid conducting an investigation into them at all.

One of the reasons for this failure, they said, was the imbalance of power between the employer and the employee at most stages of a discrimination complaint and subsequent settlement or tribunal claim, not least because employers set and oversee company policy and grievance processes.

As a result, they have control over the investigation and handling of any discrimination complaint, allowing them to retain any information acquired as part of that process and can choose how much, if any, to share with the complainant.

If the complainant decides to initiate tribunal proceedings, the Committee were concerned that they were also at a disadvantage in this forum, as employers may be more familiar with the tribunal system and have easier access to legal advice than employees. Larger employers may also have deeper pockets and therefore a larger fund to resist a claim.

The Committee therefore proposed that the government should:

  • Ensure that NDAs cannot prevent legitimate discussion of allegations of unlawful discrimination or harassment, and stop their use to cover up allegations of unlawful discrimination, while still protecting the rights of victims
  • Require standard, plain English confidentiality, non-derogatory and similar clauses where these are used in settlement agreements, and ensure that such clauses are suitably specific about what information can and cannot be shared and with whom
  • Strengthen corporate governance requirements such that employers are obliged to meet their responsibilities to protect those they employ from discrimination and harassment
  • Require named senior managers at board level or similar to oversee anti-discrimination and harassment policies and procedures and the use of NDAs in discrimination and harassment cases.

 

Iain Birrell, of Thompsons Solicitors, commented: "Although the report makes some worthy suggestions, its hands are tied by the fact that the system as a whole works against victims of unlawful discrimination and harassment; it is adversarial, technical, traumatising, uncertain and expensive. As the Committee notes, the imbalance of power which is inherent in the workplace only exacerbates and exploits that reality. As commentator Darren Newman notes, ‘The uncomfortable fact is that bringing a Tribunal claim for harassment is so gruelling an experience that it’s a border-line irrational thing to do.’

"Really, a new system needs building, but that would take large amounts of imagination, cash and political will. The current government is seemingly too busy trying to rip itself apart to give this the attention it needs, even though their natural Conservative world-view would be unlikely to see them take steps to move the current power balance too far away from business. It is more likely that one or two modest proposals may be taken forward as figure-leaf measures, whilst the bulk of the report is ignored."

To read the report, go to the committee's web page