A government proposal to ban the use of non-disclosure agreements in cases of workplace harassment or discrimination may make it harder for disputes to be settled outside of tribunals.
The proposal, ‘Make Work Pay’, which is open for consultation until 8 July and part of the recent overhaul of the Employment Rights Act, would ban the use of NDAs in cases involving workplace harassment or discrimination.
City law firm Littler, which is known for advising corporate clients with employment issues, told City AM if the ban is passed, it “may make it harder for employers and workers to settle disagreements over unproven workplace accusations.”
The Employment Rights Act (ERA) officially became law in 2025 and is being rolled out in stages across 2026 and 2027.
The new proposals introduce strict procedural safeguards, for instance requiring workers to get independent advice from a lawyer before signing an agreement.
Littler said it “could make employers less willing to settle discrimination and harassment claims if they are unable to include a reliable or comprehensive NDA in a settlement agreement.”
“A major unintended consequence of these proposals is that it could make employers less willing to settle discrimination and harassment claims if they are unable to include a reliable or comprehensive NDA in a settlement agreement,” said Ben Smith, a senior associate at Littler.
Smith added that without an NDA, “employers may have more of an appetite to investigate complaints and litigate in order to defend allegations against them that might make their way into the public domain,” which could see an uptick in tribunal proceedings.
“Reducing the usefulness of an NDA could end up having a significant impact on the ability of employers and employees to resolve disputes outside the tribunal,” Smith said.
Employers already on the brink
The employment law overhaul is already taking its toll on businesses, with many struggling due to hiked up hiring costs and piling pressure to meet new rules.
According to the latest research from AI-powered employment platform, Employment Hero, more than half of UK businesses believe that employing staff has “become more complex” over the past twelve months because of the new law.
In addition, concerns are being raised that the already overstretched Employment Tribunal could see delays – which are already expected to last up to five years – could be made worse.
