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Australia passes Respect at Work Bill, but where does that leave NDAs?
30/09/2021
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Non-Disclosure Agreement
Authors

 

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Charmaine Tsang
Charmaine Tsang is a partner at HFW
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Steve Bowler
Steve Bowler is a senior associate at HFW

On 2 September, the Sex Discrimination and Fair Work (Respect at Work) Amendment Bill 2021 was passed by the Australian federal parliament, largely based on the recommendations of Sex Discrimination Commissioner Kate Jenkins’ Respect@Work Report, which in turn stemmed from the Australian Human Rights Commission’s (AHRC) 2018 National Inquiry into Sexual Harassment.

Non-disclosure agreements (NDAs) are often used in matters involving sexual harassment in the workplace. Although NDAs can have a positive effect in terms of protecting the confidentiality and privacy of victims and helping to provide closure, there is also the risk they can be used to silence a victim to protect the reputation of a business or the harasser. The misuse of NDAs has become more of a contentious issue in light of their use by Hollywood producer Harvey Weinstein, which ultimately led to the #MeToo movement.

One of the questions raised about NDAs is whether they should be enforceable, given the potential for them to be used to prevent victims of harassment from speaking out or seeking restitution.

Notably, when conducting the 2018 national inquiry into sexual harassment, Commissioner Jenkins called on large employers to issue a limited waiver of confidentiality obligations in NDAs to allow people to make a confidential submission to the inquiry. Only 39 organisations agreed to issue a limited waiver.

Several of the women who did make confidential submissions to the inquiry confirmed that they had signed an NDA at a time when they were distressed and vulnerable and later regretted the fact that they could not tell their story or have a voice without the fear of legal consequences.

The inquiry also received several recommendations for greater regulation of NDAs including:

  • making NDAs unenforceable where they fail to meet certain mandatory standards;
  • ensuring that disclosures made to police, a court or tribunal and bodies such as the AHRC are protected and cannot be prohibited by confidentiality or non-disparagement clauses; and
  • prohibiting the use of a confidentiality clause to suppress factual information in sexual harassment claims.

Another submission from Victorian Women Lawyers, the leading representative body of women lawyers in the state of Victoria, suggested that, rather than attempting to ban the use of NDAs outright, consideration should be given to alternative means of protecting the public from repeat harassers. This could include introducing a mandatory de-identified reporting regime that would impose obligations on employers to report sexual harassment complaints to an overarching body, such as the AHRC.

While the Respect@Work Report’s ultimate recommendation did not go as far as some of the above submissions, one of the report’s key recommendations was the establishment of the Respect@Work Council (chaired by Commissioner Jenkins and consisting of the general manager of the Fair Work Commission, the Fair Work Ombudsman, and the CEO of Safe Work Australia) to, jointly with the AHRC, develop a practice note or guideline that identifies best practice principles for the use of NDAs in workplace sexual harassment matters to help inform the development of stricter regulation for such agreements in the future.

So, now that the Respect at Work Bill has passed, has this changed the status of NDAs? The short answer is no – the Bill does not address the situation regarding NDAs. However, this does not mean that change is not on the horizon.

In addition to the work being done by the Respect@Work Council, a new ministerial taskforce established earlier this year in Victoria is investigating ways employers respond to sexual harassment, whether they should be forced to report all incidents of sexual harassment to safety regulators, and the use of NDAs to settle sexual harassment allegations.

So, at least for now, the status quo remains concerning the use of NDAs in workplace sexual harassment matters. However, with the Respect@Work Council and others looking into the use of such agreements, new regulations and guidance on NDAs will hopefully be forthcoming soon.