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Australia: Restricting Non-Disclosure Agreements for Workplace Sexual Harassment Cases

Authors: Greg Robertson, Amy Zhang, Benjamin Niciak and Amelia Dowey

Non-disclosure agreements (“NDAs”) may be restricted in Victoria under proposed reforms following a wide-ranging workplace sexual harassment review.

The Victorian Government has also signalled support to ensure workplaces treat sexual harassment as an occupational health and safety issue.

On 8 March 2021, the Victorian Government announced the establishment of the Ministerial Taskforce on Workplace Sexual Harassment (“Taskforce”) to develop reforms that would better prevent and respond to sexual harassment in workplaces. In particular, the Taskforce (which included members from a broad cross-section of industry and community representatives including union and employer representatives, legal representatives and advocates for groups disproportionately affected by sexual harassment) was asked to consider ways to strengthen the occupational health and safety framework to address workplace sexual harassment, clarify employer obligations to boost accountability, encourage and support workers to speak up, and prevent the misuse of NDAs in workplace sexual harassment matters.

The Taskforce made 26 recommendations across four reform pillars adapted from the Australian Human Rights Commission’s Respect@Work: Sexual Harassment National Inquiry Report (2020) (see related article):

(a) preventing sexual harassment from occurring;
(b) supporting workers to report sexual harassment;
(c) enforcing compliance when there is a breach of health and safety duties; and
(d) raising awareness and promoting accountability in workplaces across Victoria.

Key themes from the recommendations were that work-related gendered violence and workplace sexual harassment should be treated as an occupational health and safety issue and that WorkSafe, being the relevant safety regulator, should take a lead role in prevention and response.

The most significant recommendation by the Taskforce concerned the use of NDAs which were said to be often misused to silence victims, protect employer reputations and avoid full liability. The Taskforce found that NDAs can also be used to hide serial offending and offenders.

The Taskforce recommended the Victorian Government introduce legislative amendments to restrict the use of NDAs in relation to workplace sexual harassment cases in Victoria, using the Irish Employment Equality (Amendment) (Non-Disclosure Agreements) Bill 2021 and lessons from other jurisdictions (the United Kingdom and United States) as the model for reform.

The Victorian Government accepted, or accepted in-part or in-principle, 21 of the 26 Taskforce recommendations. This included the Taskforce’s overarching recommendation that workplace sexual harassment be treated as an occupational health and safety issue, and that WorkSafe’s capacity to take a lead role in the prevention of, and response to, workplace sexual harassment be increased. A full list of the Victorian Government’s response can be found here.

The Victorian Government did not accept recommendations to:

(a) amend the Equal Opportunity Act 2010 (Vic) (Victoria’s anti-discrimination legislation) and the Victorian Civil and Administrative Tribunal Act 1998 (Vic) to allow unions to commence representative claims on behalf of members, including in relation to the enforcement of the positive duty; and
(b) ensure that designated entities were required to include mandatory clauses in their enterprise agreements that align with the requirements in the Gender Equality Act 2020 (Vic), and to implement a sexual harassment plan.

Whilst there is no set timeline for implementing the NDA reform, the Victorian Government has vowed to consult victim-survivors, unions, business groups and legal experts on a model to limit NDAs before legislation is introduced to parliament.

Observations

The potential reforms to limit NDA use in Victoria is a significant step following recent developments in sexual harassment law in Australia, flowing on from the #MeToo movement. It will be interesting to see whether other states and territories in Australia, and the Federal Government, follow suit.

Notwithstanding the lack of legislative prohibition in this area currently, some large employers are already proactively limiting their use of NDAs in sexual harassment cases, in recognition of the impact of silencing victims and the corporate reputational risks of being seen to do the same.

The Victorian Government’s endorsement of the recommendation that sexual harassment be treated as a workplace health and safety issue is not as radical but is equally important in signalling a shift in how sexual harassment should be treated and perceived. That is, as a broader workplace health and safety issue that should be dealt with as such, and not just as an interpersonal issue between the harasser and the complainant-victim. This follows recent public statements by WHS regulators and other government entities, particularly the Commonwealth WHS regulator who has been vocal in this space, about the need to see sexual harassment as an occupational health and safety issue.

Employers are reminded that under existing WHS law, employers need to take all reasonably practicable steps to ensure a safe workplace, which includes ensuring that the workplace is free from sexual harassment. Employers are also reminded of impending legislative reform by the Federal Government to introduce a positive duty to prevent and eliminate sexual harassment in the workplace.

Key Action Points for Human Resources and In-house Counsel

Subject to the Victorian Government legislating the recommendations made by the Taskforce, employers should:

  • ensure that the terms of any NDAs reached with employees do not unlawfully limit the ability of complainants to disclose matters of sexual harassment or discrimination;
  • train relevant stakeholders as to the limitation on entering into NDAs with complainants of sexual harassment or discrimination.

Irrespective of whether the recommendations made by the Taskforce are adopted by the Victorian Government, employers should:

  • consider their use of NDAs in sexual harassment cases;
  • develop strong leadership practices at all levels in an organisation to ensure that steps are taken to prioritise the prevention of all forms of sexual harassment; and
  • see sexual harassment as an occupational health and safety issue.