On 4 March 2019 the Government published a consultation paper outlining its proposals to better regulate the use of confidentiality clauses in employment contracts and settlement agreements. While acknowledging that there are legitimate commercial reasons to require confidentiality clauses, the Government has become concerned that they are being abused by a small minority of employers.
Some of the main proposals include:
1. No standard, approved wording for confidentiality clauses in employment contracts or settlement agreements.
2. To require that the independent advice received by a worker who is signing a settlement agreement must include the nature and limitations of any confidentiality clauses
as well as the disclosures that a worker is still able to make in order for the settlement agreement to be valid.
3. That confidentiality clauses in settlement agreements which don’t meet the new wording requirements will be void in their entirety.
4. To require the written statement of particulars given to all employees to outline the limits of any confidentiality clauses.
5. To explicitly confirm that no clause in an employment contract or settlement agreement can prevent someone from making a disclosure to the police.
While the outcome of the consultation will not be known until after the consultation closes on 29 April 2019, considering the current focus on non-disclosure agreements it may be wise to review any confidentiality clauses routinely used in standard employment contracts or settlement agreements.
For further information please contact us.