The Employment Rights Bill: the Impact on Equality, Diversity and Inclusion

Employers have been closely monitoring the Employment Rights Bill as it progresses through Parliament. While much detail is still to be clarified, businesses will certainly need to consider their approach to equality, diversity and inclusion strategies.

Ban on NDAs covering harassment and discrimination at work

One of the most significant recent amendments to the Bill is a clause that would render void any provision in a contract between a worker and an employer that stops the worker from disclosing or alleging any “relevant” harassment or discrimination. This would apply to both victims of harassment or discrimination and witnesses amongst current and former workers, and may even extend to contractors, trainees or individuals on work experience.  “Relevant” harassment includes all types of discrimination and harassment but notably excludes allegations or disclosures about victimisation or a failure to make reasonable adjustments.

In the past, there has been scope for NDAs to be used inappropriately to silence victims of harassment and bullying and cover up systemic abuse. This proposal therefore aims to foster more transparent and positive cultures, empower individuals to speak out against misconduct, and offer reassurance that inappropriate behaviour in the workplace will be tackled.

Although this amendment is still subject to debate in Parliament, employers should review and, where necessary, consider any confidentiality wording in employment contracts, template settlement agreements and relevant workplace policies in anticipation of this change being approved.

One consequence if this change is adopted may be that employers are less willing to enter settlement discussions with individuals given confidentiality cannot be guaranteed and employers cannot reduce reputational exposure. This would likely result in an increase in employment tribunal claims, placing further strain on an already overburdened system, and increasing costs, time commitments and emotional toll for all parties involved.

To address this, employers should take a proactive approach in evaluating and improving workplace culture to stamp out and prevent discrimination and harassment in the first place. This includes reviewing policies, investing in anti-harassment and discrimination training, fostering open communication around company values, and ensuring accountability at all levels.

Harassment at work

As of 26 October 2024, the Worker Protection (Amendment of Equality Act 2010) Act 2023 introduced a proactive duty on employers to take reasonable steps to prevent sexual harassment of their employees. Under the Bill, it is proposed that this legal duty will be extended from October 2026 so that employers are required to take “all” reasonable steps to prevent harassment. It is anticipated that regulations will specify the exact steps that employers will be required to take, which will likely include undertaking risk assessments and implementing anti-harassment policies.

This duty compels employers to move beyond reactive responses and actively anticipate and prevent harassment. It demands a cultural transformation and a rework of employer EDI strategies, embedding prevention into the organisation’s core through leadership development, performance management, targeted training, and the cultivation of psychological safety. Terms of engagement with third parties like clients or suppliers should also be reviewed and updated.

In addition, the Bill proposes to expand whistleblowing protections. Currently, a worker can make a “protected disclosure” where they reasonably believe the disclosure tends to show there has been a criminal offence, a failure to comply with an obligation set out in law, a miscarriage of justice, endangerment to health and safety, damage to the environment, or covering up wrongdoing. It has been proposed that sexual harassment should be added to this list to provide greater clarity to workers, although they must still show the matter is in the public interest. Further amendments, while unlikely to be adopted, include the creation of an independent “Office of the Whistleblower” and potential criminal penalties for retaliation against whistleblowers.

Therefore, with an increased focus on whistleblowing, employers must ensure robust whistleblowing frameworks are integrated into EDI strategies alongside the creation of a “speak up” culture to align with emerging expectations and legal standards.

Equality Action Plans

While voluntary from 2026, starting in 2027 certain large employers will be required to publish gender pay gap action plans and menopause support strategies. While the precise requirements are yet to be confirmed, organisations would be wise to start preparing now. This could include reviewing recruitment, promotion and retention practices, engaging with employee focus groups and, where not already in place, introducing a menopause policy. Early action will not only support compliance but also demonstrate a proactive commitment to equity and inclusion.

The Bill marks a pivotal shift in the UK’s employment landscape, with far-reaching implications for equity, diversity and inclusion. The proposed changes compel employers to embrace a more proactive approach to workplace culture and offer them a unique opportunity to embed EDI at the heart of their strategy. This should foster safer, fairer and more supportive environments for employees and, in doing so, strengthen businesses’ ability to attract and retain diverse talent.