Are non-disclosure agreements and confidentiality clauses (NDAs) helping to address workplace sexual harassment — or just hiding it? The Respect@Work Report called out how NDAs often protect perpetrators and silence victims. Now, with class actions hitting two of Australia’s biggest mining companies, the pressure is on for employers. Our experts weigh in on best practices for businesses.
The use of NDAs in workplace sexual harassment matters has been highly contested in recent years following the Australian Human Rights Commission’s (AHRC) Respect@Work Report, which investigated the prevalence of workplace sexual harassment in Australia. The Respect@Work Report cautioned that NDAs protect the alleged offenders and contribute to a ‘culture of silence’ by concealing the alleged conduct instead of addressing the underlying issue. 1
The recent launch of class action lawsuits against two of Australia’s largest mining companies for alleged widespread and systemic sexual harassment and gender discrimination has brought this issue back into the spotlight. It also brings into question whether the use of NDAs in workplace sexual harassment settlements is aligned with an employer’s positive duty to prevent and eliminate sexual harassment under section 47C of the Sex Discrimination Act 1984 (Cth) (Sex Discrimination Act), and what constitutes best practice for businesses moving forward.
The current landscape in Australia
The Respect@Work Report recognised that there were both advantages and disadvantages to the use of NDAs. Instead of recommending a blanket ban, the Respect@Work Report recommended that guidelines be developed in relation to the best practice approach when considering the use of NDAs. The ‘Guidelines on the Use of Confidentiality Clauses in the Resolution of Workplace Sexual Harassment Complaints’ (Guidelines) encouraged for NDAs to be considered on a case-by-case basis, consistent with taking a trauma-informed approach and providing support and protection to the person who made the allegations.
The use of NDAs was assessed again in March 2024 in the ‘Let’s talk about confidentiality’ report, led by the Human Rights Law Centre and Redfern Legal Centre. This report revealed that ‘75% of the profession has never reached a sexual harassment settlement without strict NDA terms and that 50% of respondent lawyers have never advised their clients that sexual harassment matters can be resolved without strict NDA/confidentiality terms.’2
Despite cautions in the Respect@Work Report and the Guidelines against the misuse of NDAs, NDAs remain common practice in settling sexual harassment matters in Australia.
Strict or varied NDA clauses
Whilst there is merit in the use of NDAs, especially if the victim is personally seeking anonymity, the concern arises with the use of strict NDA terms. These terms prevent a victim from disclosing details of the alleged conduct and settlement to anyone including family, friends and medical professionals.
In the context of workplace sexual harassment matters, the use of strict NDA terms is seen as concealing systemic cultural issues in the workplace and in turn, resulting in decreased self-reporting of events of sexual harassment and gender discrimination. Consequently, although generally well-intended, their use may expose businesses to legal and reputational risk rather than safeguarding from it.
Since the release of the Guidelines, we have seen some progress in this space with the increased use of varied NDA clauses. These varied clauses include carve-outs under which disclosure can be made to certain individuals and bodies (e.g. medical or psychiatric professionals and lawyers) and limits on the duration of confidentiality obligations. This is seen to be of significant benefit to both the victims and employers as they permit disclosures to facilitate ongoing care and mental health treatment while also allowing businesses to take proactive steps in addressing any cultural factors that may enable an environment where sexual harassment can occur.
Positive Duty and psychosocial risks
Under the Sex Discrimination Act, employers have a positive duty to take ‘reasonable and proportionate measures to eliminate, as far as possible’ sex discrimination, sexual harassment, victimisation and other conduct that causes a workplace environment that is hostile on the ground of sex (Positive Duty).3
Introduced to address systemic issues which enable a culture conducive to sexual harassment, the Positive Duty has shifted the focus from mere reactive responses to preventative actions to eliminate sexual harassment.
The use of strict and broad NDAs may result in employers being at risk of failing to meet their Positive Duty for several reasons including:
- Concealing inappropriate behaviour: The use of strict NDAs effectively conceals the offender’s behaviour and allows them to repeat their misconduct in current or future workplaces. This practice acts as a significant barrier to the prevention of sexual harassment in the workplace.
- Culture of silence: The use of NDAs which prevent victims from speaking about their experiences can foster a culture of silence and create a feeling amongst employees that there is a lack of action taken in response to incidents.
- Contribution to underreporting: Surveys indicate that rates of sexual harassment are increasing while the rates of reporting have decreased.4 If employees do not have confidence in the complaint-handling processes or the support they receive from their employer, employees may be discouraged from reporting incidents of sexual harassment that they experience themselves or that they witness others experience.
In addition, the newly released Work Health and Safety (Sexual and Gender-based Harassment) Code of Practice 2025 (Code) supplements the Positive Duty by providing useful guidance for employers to discharge their obligations to minimise or eliminate, as far as is reasonably practicable, the risk of sexual and gender-based harassment under work, health and safety laws.
Notably, the Code recommends avoiding confidentiality clauses in settlement agreements except where it is for the purpose of protecting the victim. In circumstances where NDAs are used, the Code suggests varying NDA clauses to ensure they are as limited as possible in scope and duration.5 In our view, this is a further indication that the use of strict and broad NDAs is no longer an appropriate approach for employers to take in these matters.
Employers should consider whether the ongoing use of NDAs is aligned with their Positive Duty and is consistent with their work health and safety obligations more broadly. With the AHRC’s new powers to investigate cases of non-compliance, an employer’s failure to uphold their Positive Duty could result in severe legal and reputational consequences.
Key takeaways for businesses
With changing community standards there has been increased scrutiny and focus on the limitation of the use of NDAs in sexual harassment cases. Increasingly employees, shareholders and consumers expect businesses to be accountable in their handling of sexual harassment complaints and to implement proactive measures to eliminate sexual harassment risks in the workplace.
When resolving these matters in the workplace, we recommend the following best practice considerations to ensure employers are meeting their Positive Duty and promoting a workplace culture of transparency:
- Consider the need for an NDA on a case-by-case basis: Assess each case on its own facts and whether the NDA is appropriate in all the circumstances. For example, consider whether the person making the allegation has requested an NDA.
- Drafting NDAs with varied terms: Consider the use of varied NDA clauses and any appropriate carve outs. For example, whether disclosure can be permitted to certain parties such as family, friends, medical or psychiatric professionals.
- Promoting a culture of transparency: Consider requiring NDAs be approved by senior management to ensure that senior management have oversight of instances of sexual harassment which will allow management to address systemic issues more effectively.
- Review existing policies: Review existing policies and ensure clear definitions of harassment and discrimination are included, along with clear processes for raising and managing complaints.
- Provide access to independent advice and support for persons making the allegation: Ensure that the person making the allegation understands the terms of their settlement.
Where to from here?
The issue of NDAs being misused in workplace sexual harassment settlements is recognised on a global scale. In response, Ireland introduced the Employment Equality (Amendment) (Non-Disclosure Agreements) Bill 2021 to prohibit the use of NDAs in the context of sexual harassment unless requested by the person making the allegation.
In Australia, Victoria is at the forefront of trying to restrict the use of NDAs in a similar way to international models. The Victorian Government has indicated an intention to introduce legislation to restrict the use of NDAs in sexual harassment cases in Victorian workplaces. The Restricting Non-Disclosure Agreements in Workplace Sexual Harassment Cases Discussion Paper suggests that, if legislated, there may also be a civil penalty regime implemented for non-compliance.
In light of the possibility of legislation in Victoria and the changing societal expectations, employers throughout Australia should continue to monitor this area and ensure their policies and use of NDAs are compliant with their Positive Duty.
For more information, please contact Emily Cossgrove (Partner) and Amy Whyte (Senior Associate) from our Workplace and Employment team.
1Respect@Work: Sexual Harassment National Inquiry Report (Report, March 2020) 32.
2 Lets Talk About Confidentiality: NDA Use In Sexual Harassment Settlements Since The Respect@Work Report (Report, March 2024) 6.
3 Sex Discrimination Act 1984 (Cth) s 47C.
4 Australian Human Rights Commission, Everyone’s Business: Fourth National Survey on Sexual Harassment in Australian Workplaces (2018), 101 – 102.
5Work Health and Safety (Sexual and Gender-based Harassment) Code of Practice 2025 pt 7.4.
