This means if an employee is dismissed or treated less favourably and they can evidence it is a result of their report to an employer, they will have protection beyond a signed NDA or settlement agreement and beyond qualifying employment periods.
What’s new: Sexual harassment as a protected whistleblowing disclosure
Historically, employees could only rely on whistleblowing protections for sexual harassment if the disclosure also fell within one of the existing categories of wrongdoing (e.g. breach of health and safety or something in the public interest). Going forward, a report that sexual harassment has occurred, is occurring, or is likely to occur will explicitly qualify as a protected disclosure, provided the worker reasonably believes it is in the public interest and meets the usual statutory tests for whistleblowing.
This means that if an employee raises such a concern and is subsequently subjected to dismissal or detriment because of it, they will have statutory protection against unfair dismissal or detriment claims under whistleblowing law. Therefore, your policies, processes and training need to be clarified and audited. It also means you can’t simply rely on an NDA or settlement agreement — the employee retains an ongoing right to report this.
Implications for settlement agreements
Can we still enter settlement agreements where discrimination or harassment has occurred?
Yes, settlement agreements will remain a valid tool for resolving employment disputes, including those involving discrimination or harassment. However, the landscape is changing:
• Employers cannot lawfully include terms that prevent a worker from reporting sexual harassment via a qualifying whistleblowing disclosure.
• Beyond sexual harassment, future provisions will void confidentiality clauses that seek to prevent disclosures about harassment or discrimination (and how an employer responded). This extension is expected to be wider than just whistleblowing protections but may not yet have an exact commencement date.
So, while settlement agreements can still be used, their confidentiality and non-disclosure clauses must be carefully drafted to ensure they do not purport to restrict a worker’s right to raise a protected disclosure either internally, to regulators, or externally where statutory conditions are met.
So, how does an employer settle these grievances lawfully?
To protect your business while settling sexual harassment grievances, it’s essential to include good faith clauses in settlement agreements. These clauses encourage employees to raise concerns based on genuine wrongdoing, rather than personal grievances or malicious intent, while still feeling comfortable to report and seek protection. By explicitly stating that claims must be made in good faith, employers reduce the risk of frivolous or baseless claims that could damage the company’s reputation or lead to costly litigation. This approach not only protects the business but also reinforces that the company values transparency and accountability, helping to prevent future disputes from escalating into formal whistleblowing claims.
Document the process
Employers should encourage prompt resolution and ensure that all steps in the process are documented thoroughly. A well-documented process not only provides evidence of the company’s fair handling of the situation but can also help in defending against future claims. Offering alternative dispute resolution (ADR) methods, such as mediation, can often resolve issues quickly without triggering a more public and costly formal claim. By managing these disputes early and transparently, employers can minimise both the time and resources spent on potential legal battles while supporting their team members.
Additionally, incorporating an independent third-party review process for harassment complaints can add an extra layer of impartiality and fairness, reducing the risk of bias and potential disputes later on.
What about retaliation?
In addition to addressing the grievance, employers should actively manage retaliation risks by creating clear retaliation protection policies. Proactively demonstrating zero tolerance for retaliation and ensuring policies are in place to monitor and address any potential issues will help defuse potentially litigious situations.
This is crucial to maintaining a positive work culture and reducing the likelihood of claims escalating into more serious whistleblowing actions. During investigations, consider practical, non-disruptive measures like temporarily reassigning the accused to separate them from the complainant, implementing garden leave, or increasing work-from-home arrangements. This ensures that the complainant feels protected from further harm and can continue to work in a safe environment without feeling isolated or unsupported. However, these measures should be carefully managed to avoid disruption to business operations. These steps not only protect the complainant but also reduce the likelihood of claims later on, ensuring that your business runs smoothly without being exposed to unnecessary risk.
Get the drafting right
When it comes to drafting settlement agreements, the goal is to resolve the grievance while also protecting the company’s interests. Make sure the agreement outlines the steps taken to investigate and resolve the complaint, ensuring it’s clear that the issue has been addressed without pressuring the employee to withdraw or abandon their rights. However, the wording should also allow for the possibility of future whistleblowing disclosures, in case the matter is revisited or escalated down the line. This will help safeguard the employer’s position by ensuring the employee can raise legitimate concerns without jeopardising the agreement’s validity.
The key to balancing this with protecting the company’s interests lies in carefully drafting confidentiality provisions that focus solely on protecting sensitive business information such as proprietary data or trade secrets, without overreaching into areas that could be construed as coercive or unlawful. By maintaining strong confidentiality protections for business-related information, while ensuring the employee’s right to report misconduct remains intact, employers can create a secure and fair environment where disputes are less likely to escalate into complex legal battles. This approach strengthens the company’s position by demonstrating a commitment to ethical business practices, enhancing its reputation and minimising the risk of legal challenges while respecting both parties’ rights.
More to come
Looking ahead to the upcoming changes in whistleblowing protections in April 2026, now is the time to strategically review your policies and practices. As an employer, you’ll need to adjust your settlement agreements, training, and reporting procedures to align with these new rules. The key is to strike the right balance between protecting your business’s commercial interests and respecting statutory employee rights. By ensuring that confidentiality clauses don’t unintentionally restrict an employee’s right to make a protected disclosure, and that settlement terms don’t silence legitimate claims, you can protect your company’s reputation and prevent future legal headaches. Proactive, well-drafted agreements will safeguard both parties and prevent potentially costly and damaging disputes.
