Lawyers must fix the problems with gagging orders before it is too late
However in a distressed, confused, and at times bewildered state, complainants can be forgiven for not being clear as to their position in that respect. It is therefore absolutely right for the Government to move to clear up that uncertainty, and that is what the current debate has been around. For some time the Government has indicated it wanted to legislate, and in March 2019, it issued its Consultation Paper with its proposals for change. It elicited a considerable number of responses, which underlines the importance of this issue for all those involved in this process, my Firm, Kingsley Napley LLP, being among those that wrote in to offer our views.
So what does the recent Government paper say, what does it commit to, have they made any missteps, and could they have gone further?
First, the paper acknowledges what lawyers in this area have been saying for some time, namely that NDAs or confidentiality clauses do not always work to the disadvantage of the complainant. Sometimes, it is very much for their benefit that they are able to acquire compensation, possibly significant compensation, without the need to resort to fully contested litigation. Commentators who fail to appreciate that fact have been roundly put to task by those who have been victims of such treatment. They say they do not have the luxury of refusing a resource that can be used to pay the bills in the difficult months and years that can follow the harassment/treatment they have suffered. However, the Government has taken the view that in as much as these agreements serve to cover up discriminatory treatment, and where this may lead to repeat offending and the continuance of unacceptable culture in the workplace, then it has to be tackled.
To that end, and to its credit, the Government has looked to adopt many of the suggestions that have been made in recent months as to how we can better tackle the issue of sexual harassment in the workplace.
Recent high-profile cases have shown that some confidentiality clauses do attempt to limit the reporting rights of individuals who sign up to them, for example by seeking to ward them off making a complaint to the police. This is despite the fact that in reality it is not possible to make such a restriction effective.
Complainants should also be left in no doubt that they should be free to talk to their medical practitioners. This includes therapists and counsellors, but only if they are bound to preserve confidentiality. Whilst that is not an issue for those who are regulated, some therapists and counsellors are not. Disclosure provisions should therefore only be extended to those who are regulated.
Confidentiality clauses should be clear, written in plain English, and be specific about what information can be shared. However, we should not go so far as to prescribe specific wording for a confidentiality clause. That would not allow for sufficient flexibility in these situations.
The current requirement for settlement agreements to be signed off by an independent advisor is not working. Individuals do not feel they have been provided with adequate legal advice at the time they sign up. They have been left unclear as to their rights to disclose, and unsure of the limitations on these confidentiality provisions. In the future, as well as continuing to receive advice on the terms and effect of the agreement generally, as has been the case since the regime was first introduced back in 1993, individuals should receive specific advice on the particular confidentiality provisions, and on the limitations that apply to these clauses.
The Government is committed to legislating in a number of areas: -
The Government has acknowledged the current debate around monitoring and reporting the use of confidentiality clauses. However, they remain unconvinced about how a reporting duty might actually work. They have therefore deferred any further recommendations in this respect, pending the outcome of the related consultation issued by the Government Equalities Office (GEO) on sexual harassment more generally.
In terms of looking to change culture in the workplace, that may come to be seen as a missed opportunity. In its paper the Government has alluded to the various responsibilities that already exist, such as the employers responsibility under the UK Corporate Governance Code, the Wates corporate governance principles for large private companies, and the legal duty under Section 172 of the Companies Act 2006 for directors to promote the success of the company for the benefit of shareholders (and in so doing to have regard to the interests of the company's employees).
But that surely misses the point. It is already the case that individuals cannot be prevented from reporting matters of this kind to the police, or to regulatory bodies. Nor should they be prevented from talking to their medical practitioners. But it is the lack of clarity around this area that has meant the Government has interceded to suggest it will further legislate. Arguably they should do exactly the same in relation to the issue of reporting requirements, whatever may be the existing law, as set out in the various codes and Act aforementioned. For they do not appear to be working or doing enough to change the prevailing culture in the workplace.
In our own submission, we suggested the Government might change the law to provide that when drawing up a Settlement Agreement, it should be a requirement that on its face, marked clearly on the front and the back, must be a form of warning notice which cautioned that contained within its terms were confidentiality clauses. This would highlight that fact to the employee who was required to sign up. It would be akin to a “Penalty Notice” that has to be affixed to an Order which is served on someone where to breach its terms may mean being punished for contempt of court, the punishment for which might be a fine or a sentence of imprisonment.
There is also an issue around the financial contribution that is offered to an employee to seek independent legal advice. It is not compulsory for an employer to make such a contribution, but in reality they usually do. The point is that if they restrict that contribution, they may anticipate the employee will only get the most basic advice, commensurate with the amount they are offering to contribute. So one option we suggested, was to set a minimum fee to cover the traditional advice given on signing up to these agreements, plus an additional sum to reflect the specific advice which will be required in relation to the confidentiality provisions, and their legal and practical limitations.
I have no idea if these ideas were considered by anyone at the Department for Business, Energy & Industrial Strategy (BEIS), but what is not in doubt is that Mrs May’s Government, in its final days, did indicate a real desire to get on and make changes in this important area of the law. It is now Mr Johnson who is in charge, and we will soon see if he follows down the same path. The fact that he has left the Employment Minister – Kelly Tolhurst – in situ may be a good sign in that respect, and we look forward to the new legislative agenda with interest.
Richard is a partner and head of the firm’s employment practice. He acts for corporates, organisations and senior individuals in relation to employment matters of all kinds. He is frequently asked to advise in situations involving allegations of sexual misconduct in the workplace following the rise of the #MeToo movement, and the cases that have followed. His expertise also includes confidentiality and restrictive covenants, executive pay, bonus and severance arrangements, unfair dismissal, discrimination, whistleblowing and redundancy programmes.
We issued a paper in June 2019, outlining some of the key points and suggested areas for enhanced clarity around NDAs, including, employment, regulatory and criminal law issues. A copy of this can be downloaded HERE.
If you have any questions or require advice concerning NDAs and/or allegations of sexual misconduct in the workplace, please contact our team in confidence. Our unrivalled experience in dealing with the highest profile and most sensitive cases involving sexual allegations in the workplace enables us to provide expert advice and support to both individuals and companies when they need it most.
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