New guidance from the Equality and Human Rights Commission on the use of confidentiality agreements in discrimination cases is expected to result in changes to current practice.
In relation to settlement agreements EHRC is advising employers to move away from a blanket position, taking a more customised approach. It gives examples of cases where confidentiality agreements will be legitimate, such as where the worker asks for an agreement, or where there are legitimate business interests.
The guidance goes on to say that if a confidentiality clause is used, its scope should be limited. It is unnecessary for example to impose a blanket provision covering the disclosure of an act of discrimination, when the employer’s primary motive is to maintain confidentiality over the compensation awarded for that act.
The Guidance also specifies that confidentiality wording should allow the worker to have discussions with people and organisations, as specified a proposed statutory list of exceptions; and it recommends that wherever obligations are imposed on the worker, these are also imposed on the employer.
A change from current employer practice is in the area of payment for legal advice. The guidance says the employer should pay the worker’s costs even if, having received the advice, the worker ultimately finds the terms unacceptable and reasonably decides not to sign the agreement
The Guidance suggests that the employer should not view the settlement agreement as the end of the matter and “where possible and reasonable” the employer should investigate and take reasonable steps to prevent discrimination occurring again. Failure to do so could affect the employer’s ability to rely on the “reasonable steps defence” in discrimination claims that come before an employment tribunal.
Finally, the guidance recommends that employers keep central records of all settlement agreements, to enable monitoring for any systemic discrimination issues in the organisation. Such a central record could include when such agreements have been used; what type of claim they were used for; who any allegation of discrimination were made against; what type of confidentiality agreement was used; and why they were used.
