The new Maternity Protection, Employment Equality and Preservation of Certain Records Act 2024 (the “Act”), which amends the Employment Equality Act 1998, introduces new restrictions on the use of non-disclosure agreements (“NDA”) in respect of allegations of discrimination, harassment, sexual harassment or victimisation.
Let’s recap: what is an NDA?
An NDA is an agreement not to share or disclose certain information. Typically, employers use them to prohibit employees from disclosing the termination of their employment and the circumstances which have led to it. Such wording is contained in most termination or compromise agreements and may or may not be limited to the confidentiality clause.
What is now restricted?
NDAs, whether oral or in writing, between employers and prospective, current or former employees prohibiting the disclosure, by either or both parties, of:
(i) allegations or complaints of victimisation, harassment, sexual harassment and / or discrimination, in relation to their employment or prospective employment; and
(ii) any action taken by an employer or employee in response to the making of such an allegation, including any proceedings taken by the employee,
will be rendered null and void. This is not just applied to the confidentiality clause but the entire agreement.
An NDA will not be void if (i) it was entered into as part of a Workplace Relations Commission (WRC) mediation, or (ii) it is an “excepted” NDA subject to the following conditions being met:
- the employee initiates the request for an NDA;
- the employee receives written independent legal advice regarding the legal implications of entering into the agreement, with the reasonable costs and expenses of the legal advisor being covered by the employer;
- the agreement is of unlimited duration, other than where the employee elects otherwise;
- the agreement is in writing and is drafted in clear and understandable language, in an accessible format;
- the agreement is subject to a 14 day “cooling off” period, during which an employee may elect to withdraw from the agreement without penalty;
- the agreement provides that the employee may make a disclosure of such an allegation or complaint to specified authorities, including the Gardaí, professional advisors, medical professionals, and trade union representatives; and
- the employee receives a copy of the executed agreement.
What should employers watch out for in practice?
- Because an employee must be the one to request an NDA, employers will need to be cautious in their “on the record” conversations with employees (as opposed to their legal advisors) where such allegations / complaints are in being to ensure that it cannot be said the employer was the one who offered an NDA in the first instance; and
- Ensure an employee obtains written legal advice prior to signing where such complaints / allegations are included in the NDA. This is a more onerous requirement than the current requirement that employees simply be afforded the opportunity to obtain legal advice and that they are advised to do so.
What further action should employers take?
Employers should now review their template employment and severance agreements considering whether any clauses need to be amended, or even removed entirely in cases involving allegations of discrimination, harassment, sexual harassment or victimisation.
As outlined, any such NDAs must now provide for the following:
- that written independent legal advice was obtained and paid for (within reason) by the employer;
- permission to withdraw from the NDA within 14-days of signing; and
- permission to disclose such allegations / complaints to specified authorities / persons.
It is essential for employers to note that if an NDA is not compliant with the Act, there is a risk that the agreement could be voided entirely, potentially leaving the employer exposed to claims. This issue has yet to come before the Workplace Relations Commission or the Labour Court, however we expect to see this in the coming months.
Contact Us
For more information please contact our Employment, Pensions and Benefits partner, Alice Duffy or your usual contact at Matheson.