In a landmark move, the Victorian Government has indicated that it will restrict the use of non-disclosure agreements (NDAs) in cases of workplace sexual harassment. This follows one of the 26 recommendations made by the Ministerial Taskforce on Workplace Sexual Harassment (Taskforce) investigating the issue. The purpose of the Taskforce was to propose reforms that will “better prevent and respond” to workplace sexual harassment.

The Victorian Government has agreed to implement 12 of the Taskforce’s recommendations, including the one about the use of NDAs. The other agreed recommendations include treating sexual harassment as an occupational health and safety (OHS) issue, and expanding WorkSafe’s role in investigating workplace sexual harassment.

Background

Commonly, employers use NDAs when settling sexual harassment complaints. Generally, NDA terms prohibit complainants from discussing matters publicly and pursuing further legal action, subject to a payment from the employer.

The Taskforce found that NDAs leave sexual harassment victims feeling isolated and disempowered. Further, they create difficulties when complainants seek future employment, being unable to disclose why they left their previous employer.

NDAs are a common business practice, minimising reputational issues and liability. However, the Taskforce found that they are increasingly misused in sexual harassment cases. Among other things, they are used to conceal instances of serial offending. Further, they represent a missed opportunity to improve workplace health and safety.

What will the restriction look like?

The short answer is: we don’t know just yet. The Victorian Government has made it clear that this is a complex issue, which will require careful consideration and a lot more work. Further, the Government has not yet introduced any legislation to change existing equal employment opportunity (EEO) and OHS laws. In light of this, the extent of the restriction is unknown. However, the Taskforce suggested that the Government pursue the form of NDA restriction being considered in Ireland at the moment. Under that Bill, employers can use NDAs, but only in limited circumstances. These include where:

  • It is the employee’s wish to enter into an NDA;
  • The employer has given the employee the opportunity to receive legal advice, at the employer’s expense; and
  • The NDA is not against the public interest.

What do you need to do?

We will keep you informed about further developments. In the meantime, if you need help in relation to a workplace sexual harassment issue, including its resolution, please contact us on insert.

Further, while the NDA restriction is not yet in place, employers are urged to exercise caution now when drafting them. We can help you with this. We can also help you with implementing or reviewing your EEO policies and procedures.

For further details, you can view the Government’s response here.