Non-disclosure Agreements in the Workplace
(Limited Text - Ministerial Extracts only)
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Jess Phillips (Birmingham, Yardley) (Lab)
I want to lend my voice to what has already been said by Members, especially by the right hon. Member for Basingstoke (Dame Maria Miller). She and I came to the issue of NDAs together in one of the most egregious cases—the case of Zelda Perkins, who has already been mentioned and who suffered for years in silence. In that case and others that I have seen, certainly, around Oxford University colleges, I want to stress how the issue of this process being about power and control should not be undermined— this was also mentioned by my hon. Friend the Member for York Central (Rachael Maskell). It is used to victimise people. It is literally the tool of an abuser.
When I met some of the whistleblowers in the Philip Green case, they told me a story about how he had said to them, “Keep on adding zeros. I will pay anything and you will go away.” That was the attitude. That is an abuser standing in front of somebody they know is weaker than they are. This is absolutely classic in all interpersonal violence relationships. They say, “I am more powerful than you. You will do as I say because I am the strong one.” Currently, the laws in our country allow that. The law in our country is written so that that it is completely acceptable for an angry, sexually abusive bully to stand in front of a member of his staff and say, “I am bigger, stronger and better than you.” Currently, we go, “He’s got a point. He is stronger. He has more zeros to add to the end of that cheque. He can shut you up.” That is the situation today. This will be happening to somebody today. Right now, as we speak, somebody who is trying to speak up about something bad happening is being told, “You’re weak. You’re pathetic.” That is a form of coercive control, and a form of violence. It is absolutely a form of victimisation, and I lend my support and voice to the amendments that the right hon. Member for Basingstoke has tabled to the Victims and Prisoners Bill.
The crux of the problem is that we, as lawmakers and policymakers, are saying, “That’s fine. That’s okay. Don’t worry because, you know, trade secrets.” That is the situation today, but let us make it so that tomorrow—
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
The hon. Lady speaks passionately, and I absolutely accept many of the comments made in the debate, but the law specifically does not allow a non-disclosure agreement to prevent somebody from going to the police about a sexual abuser. That absolutely is not the law.
Jess Phillips
I did not say that the law said that, although incidentally Zelda Perkins’s NDA did say that. I do not know what is written in all the NDAs in the country, although I have quite a lot in my inbox, so I have an idea of some of the things that people get asked for.
Of course what the Minister describes is illegal, but it is not illegal to say, “You can’t speak about this. You can’t tell the woman in the next cubicle along that the man you work for has been groping you, because you’ve been silenced.” That is what we are apparently saying is okay; we are fine with that.
The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)
It is a pleasure to serve with you in the Chair, Ms Ali. I commend my right hon. Friend the Member for Basingstoke (Dame Maria Miller) for securing this debate and for her long-standing and effective campaigning in the area of non-disclosure agreements—she will remember that I engaged with that as a Back Bencher—and the negative effect they can have when used inappropriately. I thank hon. Members across the House for their very valuable and passionate contributions.
These agreements, which are also known as confidentiality clauses, can be used in a variety of contexts and contracts—for example, to protect commercially sensitive information. However, I will restrict my comments to the area of concern, which, as Members have discussed, is NDAs used in settlement agreements in cases of discrimination or harassment.
The Government have already taken significant steps to prevent the use of NDAs in the higher education sector to protect students, who are in a particularly vulnerable position as they have moved away from family and support networks for the first time. In January 2022, we introduced a world-leading pledge, with the campaign group Can’t Buy My Silence, that commits higher education providers to voluntarily ending the use of NDAs in cases of sexual misconduct. As of 1 September, 84 providers, covering almost two thirds of students, have signed the pledge.
The Higher Education (Freedom of Speech) Act 2023 goes further and bans the use of NDAs in cases of sexual harassment, sexual misconduct and other forms of bullying and harassment in higher education. It is expected to take effect in 2024, and I recognise the important contributions made by Members here today—my right hon. Friend the Member for Basingstoke and the hon. Members for Oxford West and Abingdon (Layla Moran) and for Birmingham, Yardley (Jess Phillips)—throughout the passage of that Bill.
As a Minister in the Department for Business and Trade, I know that good employers will look to tackle bad behaviour head-on and improve their organisational culture and practice, rather than attempting to cover it up, as the hon. Member for Glenrothes (Peter Grant) clearly outlined. Organisations that do not treat such complaints in the way that he described are, in my experience, missing an opportunity.
Members of this House and organisations such as Can’t Buy My Silence have brought to light examples of where NDAs have been drafted to intimidate employees from making disclosures to anyone, as mentioned by my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon).
It is important to note that there are existing legal limits on the use of NDAs in the employment context. Some key ones were raised by my hon. Friend the Member for Cheadle (Mary Robinson)—I thank her again for all the work she does on the all-party group on whistleblowing—and by the hon. Member for York Central (Rachael Maskell), who talked about the seven NHS staff. An NDA cannot prevent a worker from blowing the whistle. That means that an NDA would be unenforceable if it stopped a worker from making a protected disclosure about wrongdoing, for example, to a lawyer or certain regulatory bodies or other prescribed persons for whistleblowing purposes.
My hon. Friend the Member for Cheadle pointed out that the current whistleblowing regime has limited scope—I think those were her words—and, as she knows, we are now undertaking a review, which will conclude by the end of this year. Indeed, officials involved in that review are in the Chamber today, so they will have heard her points clearly.
Peter Grant
We all understand that an NDA cannot prevent an employee or an ex-employee from making certain kinds of disclosures, but that is no good if the former employee does not know that. Does the Minister agree that we should change the law to require every NDA to say explicitly, on the face of the document, that it does not apply to particular kinds of disclosures, so that the former employee who has a copy of the agreement knows exactly what rights they still have?
Kevin Hollinrake
I will come on to some other points on that issue, including on the guidance that we have given to ACAS in that area.
NDAs cannot prevent workers from reporting a crime to the police or from co-operating in a criminal investigation, because such a clause would be unenforceable—[Interruption.] I may have misheard what the hon. Member for Birmingham, Yardley said, but it is very important that anybody listening to this debate, who is considering what their rights are, knows very clearly that such an agreement cannot prevent them from reporting a crime in this area.
Furthermore, the use of an NDA by an employer could amount to a criminal offence—for example, if it is an attempt by the employer to pervert the course of justice or conceal a criminal offence. Independent legal advice is a requirement for settlement agreements to be valid.
In 2019, the then Department for Business, Energy and Industrial Strategy consulted on the misuse of NDAs in an employment context. The consultation followed evidence found by the Women and Equalities Committee that individual workers may not be aware of their existing statutory rights and may be intimidated into pursuing claims even where the NDA is unenforceable—a point raised by the hon. Member for Oxford West and Abingdon. Again, my right hon. Friend the Member for Basingstoke does very important work in that area.
The consultation also heard evidence that individuals are pressured into signing NDAs without the appropriate legal advice, and therefore do not understand that their NDA is unenforceable. That is why the Government took action in developing extensive guidance, which was published by the Equality and Human Rights Commission and ACAS. It is clear that NDAs should not prevent individuals from making disclosures to the police and medical or legal professionals.
We have already legislated to prevent higher education providers using NDAs, as I said. We are keen to see how that works in practice, and it will come into force in 2024. The Government held a consultation on the matter in a wider context in 2019. We all agree that these agreements should not be used to intimidate individuals or conceal criminal conduct or illegal wrongdoing, as pointed out by the hon. Member for Strangford (Jim Shannon). I point out to him that it is in the capability of the Northern Ireland Administration to implement that in Northern Ireland if they choose, with the matter being devolved to Northern Ireland.
Dame Maria Miller
The Minister wants to do the right thing. He wants to be a role model; he wants to be a good employer; he wants to set the tone. Will he meet me and Can’t Buy My Silence and consider signing its voluntary agreement to stop the use of NDAs? Surely the Government can lead the way on this.
Kevin Hollinrake
Of course I will meet my right hon. Friend, and I am very happy to meet the campaigning organisation as well. The consultation found some support for NDAs when they helped victims to make a clean break and move on—I think that point was also raised by the shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders). We feel that an outright ban across all organisations may therefore not be appropriate and could have unintended consequences for employees.
The Government have listened carefully to the experiences shared through a consultation on sexual harassment. We are legislating through the Worker Protection (Amendment of Equality Act 2010) Bill, first introduced in the Commons by the hon. Member for Bath (Wera Hobhouse), which will strengthen protections for employees against workplace sexual harassment by placing a duty on employers to take reasonable steps to prevent sexual harassment of their employees.
Protecting and enhancing workers’ rights while supporting businesses to grow remains a priority for this Government. We are clear that the use of NDAs to intimidate victims of harassment and discrimination into silence cannot be tolerated. We are already taking action in the higher education sector; we have published extensive guidance and consulted on the use of NDAs in the workplace; and we are carefully considering how to tackle wrongful practices in a wider context.