The Women and Equalities Commission released a report this week warning that the employment tribunal system and the current rules around the use of NDAs are failing to protect people from abuse and other unlawful behaviour.
MPs found cases in which employers did not even investigate allegations of unlawful discrimination, and that it was now “routine” to cover-up breaches of the law by pressuring workers to sign gagging orders.
Further, the Committee warned that it is too difficult to have a discrimination case meaningfully resolved through the employment tribunal process.
Chair of the Women and Equalities Committee, Maria Miller MP, said: “We heard during our previous inquiry into sexual harassment in the workplace that the current use of non-disclosure agreements in settling such allegations is at best murky and at worst a convenient vehicle for covering up unlawful activity with legally sanctioned secrecy.
“It is particularly worrying that secrecy about allegations of unlawful discrimination is being traded for things that employers should be providing as a matter of course, such as references and remedial action to tackle discrimination.
“After signing an NDA, many individuals find it difficult to work in the same sector again. Some suffer emotional and psychological damage as a result of their experiences, which can affect their ability to work and move on. There is also the financial penalty of losing a job and bringing a case against an employer.
“Organisations have a duty of care to provide a safe place of work for their staff and that includes protection from unlawful discrimination.
“Some organisations now routinely settle employment disputes without the use of NDAs. We have put forward a range of measures to ensure more follow suit.”
The Committee urged the government to more strictly regulate the use of NDAs so they cannot be used to prevent the investigation of unlawful discrimination or harassment; ensure that confidentiality clauses are clear and written in plain English; strengthen the corporate governance requirement for employers to meet their duty of care to their employees; make executive bosses accountable for the oversight of anti-discrimination and harassment policies and use of NDAs in their organisation; make it a mandatory requirement that employers protect their worker from victimisation; and “urgently” reduce the costs for taking a case to tribunal as well as improve the remedies that can be awarded through the courts.