Recent legislation has limited the use of Non-Disclosure Agreements (NDAs) in some employment related cases. The use of NDAs in cases relating to allegations of workplace harassment, particularly sexual harassment has been the subject of controversy in recent years as concerns emerged that they may be seen as an attempt to gag employees or conceal certain misconduct.
The Maternity Protection, Employment Equality and Preservation of Certain Records Act 2024 (the Act) prohibits the use of NDA's involving allegations of discrimination, harassment (including sexual harassment) and victimisation by an employer and any action taken by the employer in response to such allegations.
The use of NDAs in such cases will be void unless it has been agreed as part of a settlement agreement arising out of a Workplace Relations Commission (WRC) mediation or alternatively the claimant has agreed to the inclusion of the NDA in what is known as an "Excepted NDA".
An Excepted NDA can only be put in place where the employee has requested the inclusion of an NDA and prior to entering the NDA they have received independent legal advice in writing from a legal practitioner in relation to the legal implications of entering into the NDA. The reasonable costs of the legal practitioner must also be paid by the employer.
The "excepted NDA" must also fulfil an extensive list of criteria including:
be in writing
be of unlimited duration, other than where the employee elects otherwise
insofar as possible be in (i) clear language that is easily understood and (ii) a format that is easily accessible by the parties
provide that the employee has a right to withdraw without penalty within 14 days
It must also include a provision that the agreement does not prohibit the employee making a disclosure to a defined list of people including, for example, the Gardaí (Irish police), or such individual or a member of such class of individuals, as may be specified in the agreement as a person to whom a disclosure may be made.
The amendment means that employees will be able to decide whether they want to keep allegations of discrimination, harassment or victimisation confidential, but the default position is such allegations are not to be kept confidential unless otherwise agreed. It also means that settlement agreements, which are already complex documents, will have to be carefully drafted to reflect the change in the law. Employers should review and update their template severance agreements to reflect this new legislative requirement.
For more information, please contact Paul Gough or your usual contact in Beauchamps.
