Another significant ERB Update

Enforceability of confidentiality clauses – Addition of a new clause 22A

This new clause essentially voids any agreement between an employer and worker which seeks to prevent the worker from making an allegation or disclosure relating to work-related harassment and/or discrimination as defined by the Equality Act 2010, including how the employer has responded to the said allegation or disclosure.

This provision relates to any contract, express or implied, oral or written and, most significantly, covers NDAs included in settlement agreements. It includes harassment or discrimination by the employer or by another worker of the employer. It covers current workers, ex-workers and anyone who is or was being provided with work experience or training.

If passed, this change will be huge for employers as it is standard practice to include robust confidentiality clauses in settlement agreements and it will inevitably raise the question of commerciality when it comes to settling harassment and discrimination claims outside of a Tribunal setting.

Relaxation of ‘fire and rehire’ provisions – Amendments to clause 26

The original drafting of this clause contained an outright ban on dismissing an employee who refused to agree to variations of their contract making any such dismissal automatically unfair, unless the employer could show that they would become insolvent if the changes were not made.

The latest amendments limit this ban to “restricted variations”, including reductions in pay or time off, changes to working hours, shift timing/duration and variation to pensions, save where the employer can show that not affecting the changes will impact the employer’s financial sustainability.

Clauses in employment contracts enabling the employer to make a restricted variation without agreement will also be banned… unless it is in place before the Bill comes into force?!

Dismissal following refusal to accept a non-restricted variation will not now be automatically unfair but will still need to meet a threshold of reasonableness, taking into account the reason for the proposed variation, any consultation carried out with the employee, and anything offered in exchange for the variation.  Further regulations may be introduced detailing additional factors for a Tribunal to consider.

This amendment will make it easier for an employer to make reasonable non-restricted variations to an employment contract but makes the general provisions around fire and rehire arguably more complicated. The Government are planning further consultation on this point in the autumn so, hopefully, further clarity is on the horizon.

We will keep you updated with any further developments.