- Date:
- 12 Nov 2025
In late October, the Victorian Government introduced the Restricting Non-disclosure Agreements (Sexual Harassment at Work) Bill 2025 (the NDA Bill). This bill significantly restricts the use of non-disclosure agreements (NDAs) in the settlement of sexual harassment claims brought by employees.
For years, the use of NDAs in settling sexual harassment complaints out of court has been standard practice to prevent complainants from disclosing the details of the sexual harassment they have experienced.
The NDA Bill allows complainants to decide whether they want to enter an NDA or not. This is designed to protect and empower workers who have experienced workplace sexual harassment, minimise the psychological and social impact of workplace sexual harassment, and to recognise the vulnerability of workers who are subject to workplace sexual harassment.
The bill restricts the use of NDAs by:
- limiting the circumstances in which a NDA can be entered into
- providing that an NDA (which does not comply with the requirements set out in the NDA Bill) 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, and 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 it is 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
If the NDA Bill is passed, an employer would 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 pressured 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.
The circumstances in which an employer can enter an NDA regarding workplace sexual harassment will be significantly restricted if the NDA Bill is enacted. To ensure the enforceability of an NDA an employer will have to demonstrate that the above conditions have been met.
Permitted disclosures
The NDA Bill requires that agreements between employers and employees who have complained about sexual harassment do not prevent permitted disclosures. This requirement preserve 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 Bill 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 Bill proposes to impose a clear set of rules for how employers must navigate the agreement of NDAs regarding workplace sexual harassment complaints. If enacted, the circumstances in which such arrangements could be entered would be limited to agreements at the initiative of fully informed employees which are not harmful to others. Where these circumstances arise, agreements will need to be vetted to ensure that their terms are compliant.
A broader area of concern for employers that would arise under the NDA Bill 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 Bill with regard to the relevant terms.
Consequences of getting it wrong
If the NDA Bill is enacted, employers who enter into non-compliant agreements will not be able to enforce those agreements against employees to the extent that they violate the new requirements. Terms of such agreements which do not contravene the provisions of the NDA Bill will continue to be effective.
The NDA Bill contains additional provisions to ensure that employers that enter into NDAs which they cannot enforce remain bound by obligations that they owe to complainants (such as keeping their identities confidential). However, the NDA Bill also seeks to ensure that non-disclosure obligations imposed on employers do not obstruct them from conducting workplace investigations.
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.