Victoria will be the first Australian jurisdiction to introduce legislation which prohibits the use the non-disclosure agreements (NDAs) in relation to workplace sexual harassment.
The introduction was announced on 11 July 2022, when the Minister for Workplace Safety in Victoria, Ingrid Stitt MP, released the recommendations of the Ministerial Taskforce on Workplace Sexual Harassment and the Victorian Government’s response to these recommendations. The combined recommendations and the Victorian Government response can be found here.
Limitations on NDAs in Victoria
The Taskforce recommended that the Victorian Government enact legislative provisions to restrict the use of NDAs in the settlement of workplace sexual harassment cases in Victoria.
The Taskforce highlighted that NDAs can be used to:
silence victims
protect employer reputations
avoid full liability
hide serial offending and offenders
In some circumstances, NDAs are also said to potentially cause further harm to survivors of sexual harassment by preventing them from being able to speak openly about their personal experiences.
Specifically, the Taskforce recommended that when considering and drafting the legislation, the Victorian Government should use the Irish Employment Equality (Amendment) (Non-Disclosure Agreements) Bill 2021 and lessons from other jurisdictions (such as the United Kingdom and United States) as the model for reform.
Victorian Government Response
The Victorian Government accepted the recommendation “in principle”, noting the complexity of NDAs and the significant further work required before any legislative amendments are made to regulate NDAs. This work will likely include consultation about the appropriate model with unions, employer associations, victim-survivors and the legal profession. An analysis of models used in international jurisdictions will also be considered.
Due to the scope of consultation to be undertaken, the Victorian Government has not yet set a timeframe for implementing legislative amendments relating to NDAs.
The Irish Model
Victoria will be the first jurisdiction to introduce restrictions on the use of NDAs in Australia. However, some international jurisdictions have, or are currently attempting to enact, such legislative restrictions. An example of an international model specifically noted by the Taskforce was the Irish Employment Equality (Amendment) (Non-Disclosure Agreements) Bill 2021 (the Irish Bill).
If enacted, the Irish Bill will prevent employers from entering NDAs in circumstances where an employee has experienced or made allegations of sexual harassment or unlawful discrimination, unless this is the expressed wish of the employee. Any NDA entered into at the employee's preference will not apply in relation to communications between the employee and specified persons (including medical professionals, mental health professionals and the employee's friends and family).
Further, such an NDA will only be enforceable if certain other criteria are met, including that:
the employer has offered the employee independent written legal advice, at the employer's expense;
the NDA does not adversely affect the future health or safety of a third party or the public interest;
the NDA includes an opportunity for the relevant employee to decide to waive their own confidentiality in the future; and
the NDA is of a set and limited duration.
The Irish Bill provides that an employer entering into an NDA which is not made in accordance with the above criteria will be guilty of an offence, and the NDA will be null and void. Further, the Irish Bill proposes to apply retrospectively, such that NDAs entered into before the legislation is enacted will only be enforceable if made in accordance with the criteria in the proposed legislation.
Employer Considerations
The Taskforce recommended that the Victorian legislation model the Irish Bill. However, it is unclear whether this recommendation extends to the Irish Bill’s retrospective application. Despite this uncertainty, employers should consider updating their practices regarding NDAs and any template settlement agreements used in the context of workplace sexual harassment or discrimination in the event the Victorian legislation applies in retrospect.
For more information please contact:
Jasmine O'Brien
Principal
M +61 401 926 108 | T +61 3 9611 0149
E: jobrien@sladen.com.au
Katherine Dennis
Principal Lawyer
M +61 407 013 010 | T +61 3 9611 0151
E: kdennis@sladen.com.au
Eliza Millen
Lawyer
T +61 3 9611 0177
E: emillen@sladen.com.au
