Government plans to ban non-disclosure agreements in workplace harassment and discrimination cases may make it significantly harder for disputes to be resolved outside of tribunals.
The proposal, named “Make Work Pay”, forms part of the recent overhaul of the Employment Rights Act and is currently open for consultation until 8 July.
City law firm Littler, known for advising corporate clients on employment issues, warned the ban could complicate how employers and workers handle unproven workplace accusations.
The Employment Rights Act officially became law in 2025 and is being rolled out in stages across 2026 and 2027, placing fresh obligations on businesses across the country.
The new proposals introduce strict procedural safeguards, including a requirement for workers to seek independent legal advice before signing any settlement agreement.
Littler warned the changes “could make employers less willing to settle discrimination and harassment claims if they are unable to include a reliable or comprehensive NDA in a settlement agreement.”
Ben Smith, a senior associate at Littler, said a major unintended consequence of the proposals is precisely this reduced employer willingness to reach early settlements in sensitive cases.
Smith added that without an NDA, “employers may have more of an appetite to investigate complaints and litigate in order to defend allegations against them that might make their way into the public domain.”
This shift in employer behaviour, Smith cautioned, could lead directly to a notable increase in the number of tribunal proceedings being brought forward.
“Reducing the usefulness of an NDA could end up having a significant impact on the ability of employers and employees to resolve disputes outside the tribunal,” Smith said.
The employment law overhaul is already placing considerable strain on businesses, with many struggling under increased hiring costs and mounting pressure to comply with new rules.
Research from AI-powered employment platform Employment Hero found that more than half of UK businesses believe employing staff has “become more complex” over the past twelve months because of the new law.
Concerns are also being raised about the already overstretched Employment Tribunal system, where delays are expected to last up to five years and could be made considerably worse by any rise in case volumes.