Competing interests lead to more confusion concerning NDAs

On 21 July (oddly given that it was a Sunday) the Government announced what it described as “measures to prevent misuse of confidentiality clauses in situations of workplace harassment or discrimination. Frankly the press releases are light on detail. However, the four main changes are as follows:

  • Employers will have to make clear the limitations of a confidentiality clause, in plain English, within the settlement agreement and in the form of a written statement for the employee. In other words there will have to be a notice to the employee within the agreement which clearly explains what the clause does not cover.
  • Current legislation will be extended so that it will be a requirement for all individuals signing an NDA (whether or not contained within a settlement agreement) to obtain what is described as enhanced independent legal advice, presumably at the employer’s expense. This is potentially interesting because it raises the possibility that employees may need to obtain such advice at the commencement of or during employment, perhaps even before the commencement of employment. Much will depend on the definition of what constitutes a regulated NDA and that information, perhaps unsurprisingly, has not been published.
  • All NDAs must make clear that the restrictions will not prevent the employee from disclosing the otherwise protected information to the police, regulated care and health professionals, social workers and, interestingly, legal professionals. As matters stand, most settlement agreements include a confidentiality clause which provides that not only the terms but even the existence of the agreement must be kept confidential, save for immediate family members and relevant professional advisers (i.e. those advising the employee concerning the agreement).
  • Enforcement measures will introduced to deal with settlement agreements and written statements of employment particulars that do not comply with the regulations, including that non-compliant NDAs will be legally void.

Can an employee who does not have the right to work in the United Kingdom bring a successful employment law claim?

The ‘illegality principle’ prevents a court from aiding a claimant who has based their claim on an immoral or illegal act, meaning that a tribunal or court will generally not enforce an illegal contract.

An employer of an individual working under an illegal contract can raise a defence against any employment claims the individual may bring against them. This is what is known as the ‘illegality
defence’, the basis of which is that the contract is illegal and therefore void, so the claim should not succeed.

A common example of an individual working under an ‘illegal contract’ would be an employee who is working in the UK despite not having the right to – i.e. working illegally, in breach of immigration laws.

In recent years, tribunals and civil courts have been reluctant to allow an employer to use the illegality defence to block vulnerable migrant workers’ employment tribunal claims.

An interesting Court of Appeal decision has further illustrated this. The case of Okedina v Chikale, has shown that an employer cannot always automatically rely on a breach of immigration rules to argue that an employment contract is unenforceable. The matter concerned contractual claims (including unfair dismissal) brought by a Malawian national whose leave to remain (and right to work) in the UK had expired two years before the time she was summarily dismissed.