Most tribunal cases end in a non-disclosure agreement, say experts

Parliamentary committee hears businesses should be compelled to fix problems after losing a tribunal for discrimination

Most settled employment tribunal cases now involve the use of non-disclosure agreements (NDAs), according to the testimony of an expert at the second Women and Equalities Committee inquiry into the role of the Equality and Human Rights Commission (EHRC) in enforcing the Equality Act.

Nick Whittingham, chief executive of Kirklees Citizens Advice and Law Centre, said his understanding was that the use of NDAs in settled cases was “very common”

“I asked around a little, and the figure I’m generally given is around 80 per cent of settled matters have an NDA,” Whittingham said. As the overwhelming majority of cases are settled either by conciliation or a tribunal judgment, this would suggest their use is more widespread than previously thought.

Christina McAnea, assistant general secretary of union UNISON, said a lot of individual cases the union sees “involved NDAs”, and it would “try and resist them” where possible. 

“But for the members, often it’s the only way they can see a resolution, and they would rather it was kept confidential because of the nature of it,” McAnea said. 

She added employers “often” insist on an NDA “even in things where you think there’s no need for a NDA”. 

NDAs, also known as confidentiality clauses, constitute a legal obligation to privacy and compel those who agree them to keep specified information confidential. They are often used in settlement agreements with departing employees to ensure confidential or commercially sensitive information is not shared. But their use in cases of harassment and discrimination – highlighted in a campaign led by Zelda Perkins, former assistant to Harvey Weinstein – has become increasingly controversial.  

Whittingham argued he could understand why NDAs are “there from the defendant's point of view” because discrimination is “one of those things that’s not well looked upon”. 

“Public bodies particularly don’t want to be seen as discriminating against their customers or their employees,” Whittingham said. “From our clients’ perspective, most will bring these kinds of cases not because of compensation, but because they don’t want this kind of thing to happen to other people.”

The Women and Equalities Committee had already launched an inquiry to look at the wider use of NDAs in discrimination or harassment cases. The committee has also examined sexual harassment in the workplace, and recommended the government should clean up the use of NDAs in such cases. 

The deadline for responses and evidence in the NDAs inquiry closes on 31 January 2019.  

McAnea said one of the issues for the EHRC in enforcing the Equality Act was that its  funding “has been drastically cut”. She suggested there should be a mechanism to force companies to fix issues where a tribunal decides discrimination has taken place. 

“And going wider than just dealing with that individual’s problems, I think it would be very useful having an organisation – whether it’s the EHRC or someone else – and then having an investigation and make some recommendations about structural changes that have to happen in the organisation,” McAnea added. 

Whittingham said he thought “very many clients” would forgo compensation if they believed organisations would take genuinely positive action to fix issues of discrimination. 

“If that can be built-in with an enforcement mechanism to back it up so much the better, but those are important issues for clients,” Whittingham said. 

The committee also heard from Richard Miller, head of justice at the Law Society, who said the issue of enforcement remained crucial. Too many workers who had won tribunals, he said, failed to receive compensation from their employers.

He explained there were two factors which determine compliance with tribunal enforcement. The first was the likelihood of employers being held to account to comply, and the second was the penalty if they were held to account.

“So you can increase the penalties as much as you like, but if someone thinks they won’t be held to account to pay a £1,000 fine, it’s no more of a deterrent than if they think they won’t be held to account if it’s a £100 fine,” Miller said.

Picture: Parliament TV