- Date:
- 30 June 2026
From 1 July 2026, the Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025(opens in a new window) (the NDA Act) imposes new obligations on employers settling disputes involving allegations of sexual harassment with current and former employees. This new Act significantly restricts the use and effect of non-disclosure agreements and employers will need to review their standard deeds to ensure that they are not unlawful.
The NDA Act disrupts a standard practice of employers requiring NDAs when settling matters involving sexual harassment complaints to protect themselves against reputational harm. This practice has prevented complainants from disclosing the details of the sexual harassment they experienced.
The core principle of the NDA Act is that complainants are able to decide whether they want to enter an NDA or not. The law restricts the use of NDAs by:
- limiting the circumstances in which parties can enter an NDA
- providing that an unlawful NDA is not enforceable against a complainant to the extent that the agreement prevents the complainant from disclosing material information about workplace sexual harassment
- enabling complainants to terminate NDAs, to the extent that the agreement prevents them from disclosing material information about workplace sexual harassment, after the agreement has been in operation for 12 months (provided the employee has given the employer seven days' notice of their intention to exercise this right)
- providing that an NDA is not enforceable against an employer if it prevents the employer from conducting a workplace investigation into workplace sexual harassment or if it prevents an employer from disclosing material information about the workplace sexual harassment to a prospective employer of the respondent (where allegations of workplace sexual harassment are substantiated).
Permitted NDAs
Under the NDA Act, an employer is only be able to enter into an NDA with an employee who has complained about workplace sexual harassment in the following circumstances:
- the NDA is requested by the employee
- the employee has not been subjected to undue pressure or undue influence by the employer to enter into the NDA
- the NDA is written in plain language
- the employee has been given a review period of 21 days prior to signing the agreement (which can be waived at their request)
- the employee has been provided with an information statement during a review period prior to the signing of the NDA
- both parties acknowledge in an approved form that the conditions required by the NDA Act have been met prior to entering the agreement.
These substantive and procedural requirements restrict the circumstances in which an employer can obtain the benefit of an NDA regarding workplace sexual harassment. Such agreements are only enforceable where an employer can demonstrate that the requirements have been met.
Permitted disclosures
The NDA Act requires that agreements between employers and employees who have complained about sexual harassment do not prevent permitted disclosures. This requirement preserves the right of complainants to disclose material information about workplace sexual harassment to a specified list of persons and bodies which includes regulators, legal professionals, medical professionals and police.
Restrictions on non-disparagement clauses
Non-disparagement clauses are another standard feature of deeds of release in employment matters. A disparaging comment is one that was "phrased in a slighting or deprecating way or in a way that was calculated to bring discredit". Given the sensitivity of sexual harassment, comments made by affected employees about this issue are likely to be disparaging. The NDA Act also expressly restricts the use of non-disparagement clauses to the extent that they serve to prevent a person from disclosing material information about workplace sexual harassment, whether directly or indirectly.
Ensuring settlements are compliant
The NDA Act imposes a clear set of rules for how employers must navigate the agreement of NDAs regarding workplace sexual harassment complaints. The circumstances in which such arrangements can be entered are limited to agreements at the initiative of fully informed employees. Where these circumstances arise, agreements need to be vetted to ensure that their terms are compliant.
A broader area of concern for employers that arises under the NDA Act is the appropriate means for settling workplace disputes which involve a large number of allegations, some of which may constitute workplace sexual harassment. In these circumstances, employers may be able to minimise their risk of non-compliance by carving out sexual harassment matters from any confidentiality or non-disparagement clauses. Alternatively, employers could ensure that they have complied with the requirements of the NDA Act with regard to the relevant terms.
Consequences of getting it wrong
Employers who enter into non-compliant agreements are not be able to enforce those agreements against employees to the extent that they violate the requirements of the NDA Act. That is, employers cannot enforce agreements to the extent that they prevent a complainant from disclosing material information about workplace sexual harassment.
Equally, unlawful terms in agreements cannot prevent employers from conducting workplace investigations or disclosing information about substantiated allegations of sexual harassment to prospective employers of persons against whom the allegations have been made.
If an agreement contravenes the NDA Act, terms which do not related to sexual harassment continue to be effective.
Contact our team
If you have any queries regarding these changes, the VGSO's Workplace Relations and Occupational Health and Safety team is on hand to provide tailored advice.
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