The Employment Rights Act 2025: NDA Reform And Workplace Transparency

NDAs are commonplace in employment settlements.  However, changes proposed as part of the Employment Rights Act 2025 could fundamentally alter how harassment and discrimination complaints are settled. Claire Rosney and Kerren Daly unpack the proposed changes, which could see confidentiality agreements become void unless they meet the proposed “excepted agreement” framework, and they explain why this is as much about public trust and workplace culture as it is about legal drafting. 
 
 We walk through the proposals: independent advice on the NDA itself, written informed consent, a 14-day cooling-off period with no penalty, accessible written copies, and a firm line that confidentiality cannot cover future harassment or discrimination. We also consider one of the biggest practical shifts for employers and HR teams: extending these formalities to ACAS COT3 agreements.
 
 The conversation digs into the pinch points: what happens to door of the court settlements, how time limits might be affected, whether employers will be allowed to raise confidentiality at all, and what it means if an employer gets the conditions wrong and the clause simply falls away. We also cover the proposed list of people a worker can always speak to, even with an “excepted agreement” and what all this means in practice. 
 
 If you work in HR, employment law, or leadership, this is a timely guide to the risks, the process changes, and what you should be thinking about now ahead of the expected 2027 implementation date. Subscribe, share with your team, and leave a review with your view: where should the balance sit between confidentiality and the public interest?

For the latest updates and guidance, visit Browne Jacobson's Employment Rights Act 2025 hub at brownejacobson.com/employment-rights-act  

Transcript

Claire Rosney 0:05

Hello and welcome to our latest Employment Rights Act podcast. I'm

Why NDA Reform Matters

Claire Rosney 0:10

Claire Rosney, a professional development lawyer here at Browne Jacobson, and I'm delighted to be joined today by Kerren Daly, a partner in our employment team. Hi, Kerren.

Kerren Daly 0:21

Hi, Claire. Thank you so much for inviting me to join you on this podcast. I find the subject matter really fascinating. And the reason why I find it fascinating is because I don't think it's defined by or constrained by employment law. It really is a matter of public policy. I think it's an area that the public are genuinely interested in because it reflects upon our society's views about requiring people to keep things confidential that should, in some circumstances, not be subject to a confidentiality restriction at all. So I'm really looking forward to this discussion, and I'm hoping it inspires our listeners to take an interest in this, follow its journey, and hopefully help to shape it as well.

Claire Rosney 1:16

Thanks, Kerren. And you've given a clue there into what we're going to be talking about today. And it is something that I think is fair to say has been generating a lot of discussion across the employment team. Of course, it's the proposed reforms to non-disclosure agreements or NDAs as set out under the ERA 2025. And I think Kerren, it's fair to say that it potentially is a huge change and it's got the potential for significant impact on settlement of workplace disputes. So shall we start by considering the current position? So at the moment, NDAs or confidentiality clauses are a

How NDAs Work Today

Claire Rosney 1:56

fairly standard feature of employment disputes. So, Kerren, can you give us a quick overview of where NDAs typically sit in the employment law landscape and why we're talking about reforming them now?

Kerren Daly 2:09

Okay, so they are standard. There's nothing unusual at all in having a confidentiality obligation or a non-disclosure agreement in an employment context. So if I set the scene, a worker can raise a complaint during their employment, or they could issue legal proceedings during their employment, or they might issue legal proceedings after their employment has ended. And the forum for proceedings is the employment tribunals. And if the parties want to settle their claims, they will do so through a settlement agreement, or they'll do it through a settlement agreement that's done by ACAS, and we refer to that as a settlement agreement. And as I said, and as you've said, it is standard to have a confidentiality or a non-disclosure agreement in the terms of the agreement itself. I think the issue with this is just going back to what I said at the very start of the introduction, is I think there's a public policy concern that it's potentially silencing people from speaking out or speaking up about harassment or discrimination in the workplace. And I'm sure many listeners will read articles in the press that refer to these as gagging clauses. And I think that's a very descriptive or illustrative and perhaps maybe perhaps in some cases pejorative description of the intention or the effect of confidentiality obligations in these kind of scenarios. When I was thinking about our discussion, I uh can you remember when you were at school, there would be a debate about um are you the result of your genetics or are you a result of your environment?

Claire Rosney 4:08

Yeah, the nature virtues nurture.

Kerren Daly 4:09

Yeah, nature virtues nature virts versus nurture. Absolutely. Well, I think you can look at this in the same way. Does society and public's views change the law? Or does the law change public policy and society's views, or is it the combination of the two? And I think in this area, I think it's the public's views that um have influenced the change in the law. And I think the Employment Rights Act of 2025 is attempting to address um the public's concerns about the use of confidentiality or even the misuse of confidentiality and non-disclosure agreements where people have raised in some cases legitimate concerns about um harassment or um discrimination in the workplace. So um you said it's a potentially significant change in the law, and I'm I absolutely agree with you. I I think it very much is, and I'm very much interested to see how employers are going to respond to the significant change in law. Um the expectation then from both of us, and I think other commentators is that there's going to be there is going to be significant change. Um and I'm not expecting well, I suppose I'm expecting listeners will want to have some detail behind the proposed changes. Um are you able to take us through those changes, Claire? And when you do, can you specifically highlight um the things that um employers and HR teams will need to think about?

Claire Rosney 5:55

Yeah, absolutely. So it's dealt with under section um 25 of the RA

The New Voidness Rule Explained

Claire Rosney 6:01

2025, and basically what it says is that any NDA provision which seeks to prevent a worker from speaking out about what it terms as relevant harassment or discrimination, the employer's response or the making of allegations will be void. However, such provisions in non-disclosure agreements will not be void where the agreement is what is being termed an accepted agreement. Now, there are conditions for an accepted agreement which are going to be set out in regulations to be made by the Secretary of State. And the government has indicated that these changes are going to come into force in 2027. Now, ahead of that, a consultation's been launched, which runs until the 8th of July. And what that consultation is looking to do is to gather views from interested parties, and those are then going to be taken into account to inform the regulations. So the consultation seeks views on what conditions will need to be satisfied for a non-disclosure agreement to be an accepted agreement, which individuals or bodies should individuals always be permitted to make disclosures to, notwithstanding there being an accepted agreement, and also whether the restriction on the use of non-disclosure agreements should be extended to more people than just workers. So think agency workers, self-employed, work experience placements.

Kerren Daly 7:28

So just to underline, because I think this is a really important fact, there's no blanket ban on having a non-disclosure agreement when it's in the context of a harassment or discrimination claim. It's just a case that if an employer wants to use a non-disclosure agreement, there's certain conditions that need to be met. Is that right?

Claire Rosney 7:54

Yeah, so um exactly that. And at the moment there are five proposed conditions for an accepted agreement. Now I think it's worth just mentioning here that it looks like the UK

Five Conditions For Accepted Agreements

Claire Rosney 8:07

model will broadly follow the model that was introduced in the Republic of Ireland at the end of 2024. So if I just start then by taking you through and strapping because there's quite a lot of detail here, but I think it's important for employers and HR professionals to understand so that they can then start to see what the new landscape may look like. So the first thing is the worker has to have received independent advice before entering into an accepted agreement. Um, and that's got to be, as I say, from an independent legal adviser on the terms, effect, and legal limitations of the non-disclosure agreement relating to the relevant harassment or discrimination. Now, the adviser has to be named in the agreement and they have to have indemnity insurance. Now, interestingly, this will apply to both settlement agreements and those agreements that you mentioned that are conciliated through via ACAS, which are known as COT 3 agreements. Now, this is quite a shift because at present the only requirement for an individual to receive legal advice before entering into an agreement applies in the case of settlement agreements. It doesn't apply in the case of COP3s, and for that reason, COT 3s are sometimes favoured over using a settlement agreement. However, this consultation proposes extending the definition of relevant legal adviser to include ACAS conciliators, although they won't be required to hold indemnity insurance because individuals have got a right of recourse against ACAS as a public body. Now it's not proposed that employers will cover the cost of this independent legal advice, but the consultation notes that most employees already, sorry, most employers already contribute to the cost of advice provided to ensure that a settlement agreement is legally valid. And the expectation is that the same approach will be taken in relation to accepted agreements. So I think it's fair to say that in terms of the requirement for independent uh advice, not a lot changing there in respect to settlement agreements. The big change is coming about because it's going to extend to COT threes. Now, the second condition is that workers have to have expressed a preference in writing to enter into an accepted agreement following receipt of that independent advice. So a worker can only enter into an accepted agreement by providing written informed consent to their employer, having had that independent legal advice. And a failure to do so would mean that the non-disclosure agreement was void. Now, the consultation also seeks views here on whether an employer should be able to suggest confidentiality provisions to an employee. So, although a blanket prohibition prevents an employers from suggesting confidentiality would prevent employer misuse of NDAs, I think the consultation reflects the fact that this actually could be a bit restrictive and could restrict appropriate use of NDAs. For example, where workers might not be aware that an NDA is an option without an employer raising it. Now, I do think that this is quite significant because if employers aren't able to suggest confidentiality provisions, there could well be less inclination to settle, meaning potential for more litigation. And we know that this system is already buckling. I was on an employment tribunal user group meeting yesterday, and they said that their quarter three figure for receipt of claims was the highest it's ever been. You know, we're seeing cases listed into 2028. So I do think that that's something that needs to be bore in mind. This next one's quite interesting. Workers will be given a right to withdraw from an accepted agreement without penalty. So a 14-day cooling off period in which they can say, nope, change my mind, and there's no penalty. So the consultation here does acknowledge that introducing a cooling-off period could have wide-reaching consequences. So, for example, an individual who withdraws for an accepted agreement during the cooling-off period, are they also withdrawing from any broader settlement agreement? So withdrawing from the accepted agreement would alone would obviously cause practical difficulties, given that it's often linked to an employer's obligation to pay monies under a broader settlement agreement. So, you know, if the settlement agreement was settling more than just the relevant harassment discrimination, there's going to be some difficult uh questions and issues that would need to be navigated there. The other thing they're looking at is whether an employee could waive the cooling-off period in specific circumstances, such as whether settlement is reached shortly before or during an employment tribunal hearing. And Kerren, you and I have both done litigation over the years. We know that cases do settle at the door of the court or even once the hearing has started. So again, I think that does uh raise practical issues if there is going to be a cooling-off period. And then, of course, will a cooling off period impact the calculation of time limits within which a worker can bring an employment tribunal claim? Now, interestingly, when I was doing a little bit of research for this uh discussion today, I did look to see if there were any stats in Ireland around uh Republic of Ireland about whether there's been less use of um settlement agreements since the changes were introduced there. I didn't find any stats, but I did find commentary from lawyers reporting that they are seeing withdrawals within the cooling off period that they have under the uh Republic of Ireland system. Okay, so we're on to number four now. Um I don't think this is very controversial, but a written copy of the accepted agreement should be provided to all parties in an accessible format. I think that already happens and obviously represents good practice. And then finally, the last one is accepted agreements are unable to prevent workers speaking out about future harassment or discrimination. So the point is here that the non-disclosure agreement can only relate to something that's already happened, so harassment or discrimination that's already taken place, you can't have a pre-dispute NDA for future conduct. The other interesting thing that they're looking at as well is um a potential condition whether the agreement should stipulate a time limit on confidentiality obligations. So should the NDA be for a fixed term or a time limit agreement by the parties after which confidentiality obligations will end? Um so, yeah, there's some really interesting points there, I think.

Kerren Daly 14:45

Um, Claire, one thing that I just wanted to check with you is so even where you have an accepted accepted agreement in place, there are certain people or certain organisations that a worker will always be able to speak

Who Workers Can Always Tell

Kerren Daly 14:59

to. Is that right?

Claire Rosney 15:02

Yeah, that is correct. Um and there's a list. Um so the proposed lists will be law enforcement, qualified lawyers, um, regulator professionals, I think doctors, social workers, tax advisers, individuals or organisations who provide uh support uh services to victims in relation to the effects of the relevant harassment discrimination, certain regulatory bodies, um, individuals or organisations who advise on individuals' employment rights, so conciliation, mediation, trade union representatives or trade union equality representatives and close family members for the purposes of receiving support in respect of the relevant harassment discrimination. Now, the consultation does also seek views on whether disclosure should be permitted to wider family and friends or employers and recruiters, um, for example, to explain the reason for leaving previous employment. So, yeah, absolutely right. There will be some people who, even if you've got an accepted agreement, that won't stop the individual being able to discuss with them. But um, how um widely that's going to be cast, I think, is still up for debate.

Kerren Daly 16:19

That seems to be a relatively large cast list, and I don't know what the obligations of those people are to also maintain confidentiality.

Claire Rosney 16:29

Um that's an interesting aspect. Some of them will obviously be bound by their own professional obligations. So if you're thinking about qualified lawyers, um you know, regulatory bodies, but if they're gonna um extend it to you know family members or friends, then as you rightly say, but you would like to think they would build in some protections because it surely can't be right, can it, that you can tell a family member um and you're not in breach, but then that family member can tell whoever you know they want or potentially broadcast it on on social media. But to a certain extent, we already grapple with that, I think, at the moment. So, you know, will it really be a big change then? Potentially not.

Kerren Daly 17:10

Yes. So um priding myself on being a lawyer that

What Changes For Employers

Kerren Daly 17:16

provides risk-based advice, I always need to understand the risks and establish whether there are any uh risks that are worth worrying about so I can discuss it with my clients, and then my clients can make a considered decision. So uh in this particular situation, if an employer gets it wrong, so for example, they include a non-disclosure agreement and it doesn't comply with the conditions that you set out, what are the consequences?

Claire Rosney 17:48

Well, effectively the confidentiality provision would be void, so it would just fall away, meaning the worker could speak out without being in breach of the agreement. So we've talked quite a lot about what the accepted agreements might look like, but now I think it's probably worth turning to what it means for employers specifically. So can you just walk us through Kerren the key differences? So, what's actually changing from how things work today?

Kerren Daly 18:18

Okay, so I think essentially what you're effectively asking me to do is a comparison for the listeners to what do we do now and what what I suppose changes are likely to take place. So for now, as you've um well, we've both already outlined, um claims are settled through settlement agreements, and settlement agreements require the individual to receive independent legal advice on the terms and effect of the settlement agreements, and that independent legal adviser will uh essentially sign the agreement. They sign a certificate, but you get my point, they sign the agreements. Um for um a settlement agreement that's done through ACAS, which is a COT three, it's much more informal. Um it's signed by the individual and it's signed by the employer, and the individual does not need to have sought legal advice, and even if they've sought legal advice, they don't there's no requirement for that to be noted on the actual um COT 3 agreement itself. Um currently there's also no requirement for written informed consent, as you've got under the proposed new regulations, um for um um for having a confidentiality obligation in the settlement agreement or COP 3. Um you simply sign the agreement or you sign the COP three uh that contains a confidentiality provision. Um there's also no cooling off period. So if you sign, if as an individual, you sign a settlement agreement or a COP three um and the employer signs it and there is a binding written agreement, then you could then the employee can't change their mind. Um and then the I think the the last the last current position is um if the confidentiality obligations or non-disclosure agreements are used nearly all the time in settlement um agreements, um, and we'll I almost always see them used when there's been a complaint of harassment and discrimination. So that's the current position. Uh with the proposed um changes, um the new law um as as we've both identified is going to add significant new requirements where allegations of harassment um or discrimination have been made. Um and you've already set out those, I would say, significant, fairly stringent requirements.

Claire Rosney 20:54

Yeah, so I think if we think about it then,

Pinch Points And Unintended Consequences

Claire Rosney 20:57

what do you think this means for how employers are going to approach settlement negotiations going forward? You know, what are they gonna have to to do differently kind of in the sort of day-to-day from what they've already been doing?

Kerren Daly 21:12

Um I think the practical changes that will need to be considered by employers when they are settling claims that involve um allegations of harassment or discrimination, and the employer wants the employee or ex-employee or worker to keep it confidential. I think the practical things that the employer will need to think about the most obvious one being time. They're just gonna have to build in more time to enable the individual to um seek independent legal advice. Um, just more time just for settlement negotiations because the individual is going to have to uh seek advice on the NDA. And of course, there's also the cooling off period. Um, I think all of us, employers and and and law. Employers alike are going to have to look at our template settlement agreements. And I think reflect upon the need for confidentiality and where confidentiality is needed or wanted. I think employers are going to have to justify it. Essentially, or I think for want of a better word, is for audit or internal purposes. Why am I settling an allegation of harassment or discrimination? And why am I requiring that person to keep it confidential? So I think there might be a need for thought about whether there needs to be a narrative in the settlement agreement or even in the COT three. But I think the third practical change, um, and in many ways is is is critical to all of this, is if you're going to be entering into a settlement agreement or COT three that's got the accepted agreement conditions. So in other words, you need a you you want a non-disclosure agreement. The conditions that you've set out, I think a lot of care and attention is going to be required to make sure all of them are met. Because as you quite rightly identified in the question that I asked you, if they're not met, then there are no confidentiality obligations at all. It's it's void. Um the fourth is um it is really in relation to the um requirement in the um proposed uh regulations about obtaining written consent. Um I'm not clear on what the process is, um, and that will need to be considered by employers once um we've got regulations in place, we know when they're going to be implemented, and then employers are going to have to think about the practical consequences of that process. Um, and the last is really um the COP three's the ACAS regime. Um, and as I said earlier, it's a relatively simple and informal process. Um, the new provisions I think are going to make the COT three or ACAS process much more formal when there is a claim of harassment and discrimination, and the parties are agreeing that there's going to be a confidentiality or uh a provision or an NDA provision.

Claire Rosney 24:27

Yeah, I agree. And we know that ACAS are already again, you know, likewise struggling with the volume of claims coming through at the moment. We've seen an extension to the um early conciliation period. And again, you know, that tribunal use group that I mentioned, the ACASH reports, you know, saying that they're looking at innovative ways of working because of the additional burden. So, of course, you know, this has got the potential to increase that work um load again. I think then if we we take a moment then to just think about pinch points, where do you think employers and and us legal advisers are going to feel the most friction with these new rules? Pinch points, frictions, yeah.

Kerren Daly 25:07

The practical problems. Yes. Um yeah, lots of them. Um the practical problems, I think many of them you've already identified. Um the most obvious is at the door of the court settlements, you know, where people settle claims literally, literally days before or the the morning of the hearing, or actually during the hearing, because everyone's just lost the will to live and just feel like it's in everybody's best interest to settle. Um, I don't know what the impact of the cooling off period is. I know you've already mentioned this. Will the employment tribunal vacate the hearing? Um, I'm assuming they'll have to. Um but my concern is if the worker or ex-worker enters into the agreement, there is a cooling off period, but they understand that if they uh object to the NDA during the cooling off period, what's the likelihood of the whole of the settlement falling away and the matter having to be relisted? And we know that employment tribunal claims are struggling, and so they might not get another substantive hearing for another couple of years. So I I I I I think that's a practical problem for everyone, not just the pinch point for employers. Um I think time limits for bringing claims in the employment tribunals has become quite an art with an element of mathematics in it. And I think the cooling off period will stop the clock. So I think that's going to affect the time that the time limits, but I suppose we'll wait to see.

Claire Rosney 26:52

Yeah.

Kerren Daly 26:53

Um I think consultation is also seeking views on whether employers should be able to raise the possibility of confidentiality or a non-disclosure agreement as a term of the settlement. And again, you've already mentioned that. Um, but I think if that becomes law, I think there's a significant unintended consequence to that. So I'm hoping that's going to be played out and considered in the consultation process. Um as noted earlier, um, the extension of the formalities to ACAS and the COP3 agreements is significant. Um, I don't know what ACAS's view is on it, but I'm assuming ACAS will have contributed um to the consultation process, and their views will be taken seriously. Um the other uh point is I think if I can put it in this way, it's it's the link between the accepted agreement, so that's the non-disclosure agreement, and the actual other terms or the broader terms of the settlement package. And I think you've already noted upon it, but I kind of have a slightly, well, not a slightly different, I've got an an another view on it as well. If the worker withdraws after the cooling off period, is there no agreement at all? Or is there an agreement with no non-disclosure agreement? And if it is the former, i.e., there's no settlement agreement, will the worker feel compelled to agree to the non-disclosure agreement? So, in other words, you know how we talk about informed consent? Is it is there an argument to say it's not really, it's not real consent, or at least there's a perception that it's not real consent, if the requirement for a non-disclosure agreement is a requirement, and if you don't, if you if you if you don't accept it, well, there's no deal, it's off the table. Um, and then I think lastly, um many employers are guided by I suppose a commercial incentive to settle. They weigh up the heartache of litigation, the management time taken, um I suppose the inherent legal risks in litigation, and they also obviously think about legal costs. So, how will those type of employers respond if they're not able to secure uh a non-disclosure agreement where there's been a claim of harassment or discrimination and they're very much concerned, say, about um um publicity and their reputation? Will it be a case of, well, we'll have to wait and see you in tribunal because we're going to defend the claim? And as you quite rightly said, how are the tribunals going to cope with that increase in in claims?

Claire Rosney 29:47

Yeah, I think there's certainly an awful lot to think about here, isn't there? Um and it's gonna be really interesting to see where we land post this consultation and we get the the regulations um to see just how much of a shift that this is going to be. So before we close, what advice would you give to employers who may be concerned about

Practical Advice And Consultation Deadline

Claire Rosney 30:09

the impact of these changes?

Kerren Daly 30:12

Um I was thinking about, you know, those t-shirts or mugs or coasters that have that little saying on it, keep calm and carry on. Well, I think my advice is exactly that. Keep calm, carry on what you're doing, keep yourself up to speed with the proposed changes, and then make the required changes in good time so that you're ready for the new law when it's it when it's implemented. Um and then

Claire Rosney 30:41

sorry, go on, Kerren.

Kerren Daly 30:43

I I think finally, um, I suppose the message I wanted to say to the listeners is the deadline for consultation closes on the 8th of July. Um there is time to contribute to the consultation process. The regulations are not in final form. There are significant questions that need to be resolved, as we've discussed today, the cooling off period, whether an employer can suggest a non-disclosure agreement, uh, and and and and also we haven't mentioned today whether the actual regime will extend to people who are not workers. So there is a genuine opportunity for employers to shape those regulations. Um, it's just a case of easy for me to say, make time, find time to respond to the consultation process, and very much in the hope that you'll be able to help shape it.

Claire Rosney 31:35

No, I think that that's really good advice. And um I think you're right, you know, the devil is going to be in the detail, and at the moment we don't have that, do we? I think it's also worthy of mentioning that wherever the final position lands, one thing is almost certain processes are going to take longer. So, you know, you've already mentioned that employees are going to need to build in additional time and process to their approach to harassment, discrimination cases going forward. So I think, you know, in terms of that mindset and going on the journey, you know, start getting comfortable with the idea that settlement in these cases is going to take longer, there's going to be advice requirements, cooling off periods, the written consent. Um, and also, you know, you can't now take it as a done deal at the point the agreement has entered into, that that's it. Um, you're not going to be at that point now until you get to the end of the cooling off period, if that's you know, ultimately how it ends up um working in practice. I think as well, where tribunal deadlines are involved, you know, needing to think about settlement a lot earlier into the process and factoring this into cost estimates and settlement strategies is also going to be important. I think the last thing I would say here is that more broadly, this might be a good opportunity for employers and organizations to review their wider workplace cultures and practices around harassment discrimination. I think it's fair to say the legislative direction of travel is clear. Um, you know, it it is going to become more restrictive about using NDAs. But there is still the old adage that prevention is always better than cure. So it's good practice for employees to be proactive and address these issues early and make sure they're building that culture of transparency and accountability. And hopefully, you know, if employers are doing that, that will help manage the risk of issues escalating, um, or if nothing else, at least being well placed to defend a claim if that is ultimately where it lands. So, Kerren, thank you so much. I think that's been a really valuable conversation. I think there's a lot for employers and HR and legal teams to get to grips with, and I think you know, 2027 might feel like it's some way off. The consultation is live now, and employees should really start to think about the impact of these changes. So I think I'd just like to say to everybody, thank you for listening. Um, if you'd like to discuss how the proposed changes might affect your organisation, then please do get in touch with a member of the Brown Jacobson employment team. And if you've enjoyed today's episode, then have a look at our Employment Rights at 2025 Hub, which is a one-stop shop for all our words out, ERA resources, including articles, podcasts, and webinars. Thank you very much for listening and we'll see you soon. Thanks, Kerren.

Kerren Daly 34:31

Thank you too, Claire. That was a fascinating conversation, and I very much hope that I'm going to be invited back for um the follow up session.

Claire Rosney 34:41

Thanks, Kerren. And yeah, no doubt we're going to have uh more to talk about when we see the draft of the regulations. Thanks, everyone. Bye bye.