What will the bill include?
On 8 July 2025, the Ministry of Housing, Communities and Local Government announced that it would introduce a new amendment to the Employment Rights Bill (‘ERB’). The proposed clause 22A would ban any contractual term which aims to prevent workers from making an allegation or disclosure about discrimination under the Equality Act 2010 (i.e. harassment, discrimination arising from disability, direct and indirect discrimination). This would therefore likely cover settlement agreements which typically include confidentiality clauses.
As a general point, it is worth flagging from the outset that much of the detail still remains to be determined. The protection is also set to apply widely, including to former workers, and witnesses of harassment or discrimination.
Are there any exceptions?
Clause 22A will not apply to victimisation or failure to make reasonable adjustments for employees with a disability. The rationale for this remains unknown. The changes would also not affect confidentiality restrictions that aim to protect commercially sensitive information or intellectual property rights. The proposed wording also exempts so-called ‘excepted agreements’. It remains to be seen what this means but it could potentially mean that settlement agreements, where employees receive independent legal advice as part of the process, would be exempt from clause 22A.
When will this change enter into force?
For the moment it remains unclear when this ban would come into effect because it was not included in the government’s recent timeline for implementation of the ERB. As for the other measures included in the ERB, it will be subject to consultation and so is unlikely to appear before 2027.
Could there be any unintended consequences of this change?
On 17 July 2025, the government published its impact assessment related to this proposal, which can be found here. At paragraph 65, the document acknowledges that some employers may be less willing to settle potential discrimination claims out of court if confidentiality clauses will not apply to discrimination related disclosures. In its press release, which can be found here, the government framed this as part of an attempt to promote further transparency in the workplace. It remains to be seen if these changes will achieve this goal.
How can employers prepare for these changes?
Firstly, it is important to note that these changes will not come into effect immediately and so employers will have some time to prepare. The current proposals may also be subject to change given that the legislative process has not finished at the time of writing.
However, we would advise employers to review their existing templates for settlement agreements, employment contracts or NDAs and update these to reflect the upcoming changes (or take appropriate legal advice on this point). Organisations will also need to re-consider their approach when managing disclosures of discrimination and should proactively retrain HR staff and managers to deal effectively with these changes.
Finally, employers should also consider their strategy regarding settlement moving forward – possibility opting to defend any future claims if they cannot rely on the existing protections afforded under NDAs or settlement agreements.
Please note the contents of this article do not constitute legal advice. If you require any further information or if you would like our assistance, please contact us at employment@berrysmith.com or on 02920 345 511.