Last year, Sir Philip Green was accused of using NDAs to silence former employees’ allegations of bullying and sexual harassment.
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The Government has announced a crackdown on the use of workplace “gagging clauses” to cover up allegations of sexual harassment, racial discrimination and assault.
In recent months, legislators have come under pressure to protect victims of workplace abuse from being silenced by bosses after a number of high-profile cases.
Last year, Sir Philip Green was accused of using non-disclosure agreements (NDAs) to stop several former employees from speaking out about bullying and sexual harassment at his Arcadia retail group.
Many businesses use NDAs to protect commercially-sensitive information but company bosses have come under scrutiny for their alleged use of the clauses in response to abuse allegations following the “me too” movement.
Business Minister Kelly Tolhurst has said that the government is now launching new laws to protect workers from their employer’s NDAs to hide potential abuse and discrimination.
She said the Government will not tolerate the use of the confidentiality clauses to “silence and intimidate victims to stop them speaking out”.
The new legislation is intended to, for the first time, ban NDAs from being used to stop people disclosing information to the police, doctors or lawyers.
Currently, NDAs cannot prevent people from whistleblowing in the public interest.
The crackdown will ensure that employers make clear the limitations of the confidentiality clause in plain English, the business minister said.
It will also provide more advice to individuals over the clauses and introduce new enforcement measures to deal with agreements which fail to meet the legal requirements.
Ms Tolhurst said: “The vast majority of businesses comply with the law and use NDAs legitimately – from protecting commercially-sensitive information to preventing information being shared with competitors.
“As we have seen in the news recently, there are a handful of employers using NDAs to cover up criminal acts in the workplace, including sexual harassment, assault and racist discrimination.
“The new legislation will stamp out misuse, tackle unacceptable workplace cultures, protect individuals and create a level playing field for businesses that comply with the law.”
Rebecca Hilsenrath, chief executive of the Equality & Human Rights Commission, said: “Harassment and discrimination should never go unanswered and unchallenged just because victims are prevented from speaking out.
“This new legislation will help to end ambiguity about employees’ rights and stop the misuse of NDAs to protect corporate and personal reputations and obstruct justice.”