The move comes after a critical spotlight was shone on retail guru Sir Philip Green’s use of the legal tool.
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Employers will not be able to use confidentiality agreements to stop workers from reporting crimes, harassment or discrimination to the police under toughened Government legal measures.
The aim is to clamp down on abuse – which in some cases has seen employers use non-disclosure agreements (NDAs) and confidentiality clauses to intimidate whistleblowers, hide harassment and discrimination incidents.
The legal measures, described by Prime Minister Theresa May as a “clear message” that changes in the law are needed to back under-pressure workers, come after a critical spotlight was shone on retail guru Sir Philip Green’s use of the legal tool.
In giving workers protection for the first time from the threat of these agreements potentially being used to “silence victims”, Business Minister Kelly Tolhurst suggested it could also help prevent employees from being duped into signing gagging clauses which they were unaware of and help clarify their rights.
The proposals include clarifying in law that confidentiality clauses cannot prevent people from speaking to the police and reporting a crime, or prevent the disclosure of information in any criminal proceedings.
They call for a clear, written description of rights before anything is signed in confidentiality clauses in employment contracts or within a settlement agreement.
It also extends the law so that it means a worker who signs up to a settlement agreement receives independent advice which must cover the limits of any confidentiality clauses, so they have all the relevant facts.
The Telegraph has reported that five of Sir Philip’s employees signed NDAs to keep their complaints quiet, with one being paid more than £1 million.
Sir Philip, 66, denied his behaviour was criminal or amounted to gross misconduct.
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.”
Ms Tolhurst said: “Many businesses use Non-Disclosure Agreements and other confidentiality agreements for legitimate business reasons, such as to protect confidential information.
“What is completely unacceptable is the misuse of these agreements to silence victims, and there is increasing evidence that this is becoming more widespread.”
By seeking to protect workplace rights, the UK Government, good employers and the public are showing they will not accept the “disgusting behaviour” involved in the sexual harassment and bullying of women at work, according to Women and Equalities Minister Penny Mordaunt.
Backing has also come from Acas chief executive Susan Clews, Equality & Human Rights Commission chief executive Rebecca Hilsenrath, and former film mogul Harvey Weinstein’s ex-assistant Zelda Perkins.
Weinstein is fighting a series of sexual harassment complaints, which he denies.
Ms Perkins said she hoped “these steps will turn into larger strides of legislative change which will put an end to the powerful using the law as a tool of abuse”.