NDA restrictions under the Employment Rights Act 2025

We know that the Employment Rights Act 2025 includes new restrictions on the use of NDAs (Non-Disclosure Agreements). It appears likely that NDAs will be void if they prevent a worker from making allegations about harassment or discrimination.

The government intends to introduce specific conditions that must be met for such agreements to remain valid, and the detail is now becoming clearer. This is important for all employers who use settlement agreements on termination in cases involving any allegation of discrimination (including harassment).

What will happen and when?

These changes are not expected to take effect until 2027. Consultation is currently underway to determine what will qualify as an “excepted agreement” – in other words, what will still be permitted.

The starting point is that an NDA will be void if it prevents an employee from speaking out about:

• Relevant harassment or discrimination
• The employer’s response to disclosures or allegations of harassment or discrimination

This applies to all forms of discrimination and all types of allegations, whether well founded or not.

Despite this general restriction, NDAs meeting certain conditions will be treated as “excepted agreements” and remain valid. The government is currently consulting on what those conditions should be.

What might an exception look like?

The consultation paper suggests that an NDA should be valid if:

• A worker receives independent written advice from a relevant adviser before entering into the agreement
• The advice covers the NDA’s terms, effect and legal limitations
• The agreement identifies the relevant adviser
• The worker confirms in writing their preference to enter into the NDA after receiving independent advice
• There is a 14-day “cooling off” period allowing the worker to withdraw without penalty
• All parties receive a copy of the agreement in writing
• The NDA only relates to incidents of harassment or discrimination that have already occurred, and does not cover future incidents

The government is not currently proposing to require employers to fund the worker’s independent advice, although this is already common practice in settlement agreements.

Settlement agreements already allow confidentiality carve-outs in certain situations, such as reporting to the police, notifying regulators, or making a protected disclosure. It is expected that excepted agreements will take a similar approach. It is also likely that disclosures to close family members will continue to be permitted, as is currently the case.

What does this mean for employers?

The proposals suggest that employers will still be able to include NDA and confidentiality provisions in settlement agreements, provided the required conditions are met. As these broadly reflect existing practice, the practical impact may be limited in many cases.

However, the consultation raises an important question: should NDAs only be valid if requested by the worker, or should employers also be able to initiate confidentiality provisions?

Depending on the outcome, this could introduce additional complexity. It may raise practical issues around how such a request is made, and whether employees could feel pressured to agree. This, in turn, could affect the validity and enforceability of agreements.

The consultation remains open until early July, with new rules not expected to come into force before 2027.