New Restrictions for Non-Disclosure Agreements involving Sexual Harassment Complaints

Introduction

Broadly, the purpose of the Act is to restrict the use and enforceability of non-disclosure agreements (NDAs) in circumstances involving workplace sexual harassment. The Act does not apply to NDAs that predate it.

Insight into the Act

The Act does not ban NDAs outright. Instead, it makes an NDA relating to workplace sexual harassment unenforceable unless a set of strict preconditions is met, and only if it does not breach the explicit prohibitions under the Act. In short, the Act is designed to prevent situations in which a worker is pressured to sign away their right to speak about their experience. However, when properly made and in accordance with the Act, NDAs can still be prepared and enforced.

The preconditions that dictate whether an NDA can be enforced are found in section 8 of the Act, and we have also summarised them below:

1. The employee has made a genuine request to enter into an NDA.
2. The worker is given the official Workplace NDA Information Statement before signing.
3. The worker is given at least 21 days to review the agreement and obtain legal advice (which they may choose to shorten or waive).
4. The employee’s request has not been made as a result of pressure or influence by others.
5. Both parties sign an approved acknowledgment form confirming the preconditions have been met.

A few important points to keep front of mind

1. Even under a valid NDA, a worker can still speak to police, medical and legal professionals, and trusted family or friends
2. NDAs about the amount of any settlement payment are not affected. Note that disclosure is permitted to certain financial persons and bodies
3. A worker can terminate an NDA after 12 months (on 7 days' notice) without losing their compensation.
4. The Act covers employees, contractors and volunteers who usually work in Victoria.

My recommendation to employers

You should review your complaint-handling and settlement practices now and before a complaint lands on your desk. In particular:

1. Do not assume that confidentiality will be the default.
2. Update your template deeds and settlement documents, and build the Information Statement, 21-day period and acknowledgment form into your process.
3. Train managers and HR on the new preconditions and remind them of the positive duty to eliminate sexual harassment.

How Sharrock Pitman Legal can help

Workplace law is ever evolving. Employers should seek advice at the earliest opportunity. If we can assist you with NDAs or other employment law issues or guidance, please do not hesitate to contact our Workplace Relations team on 1300 205 506 or email sp@sharrockpitman.com.au.

Disclaimer

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

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