The Victorian government has signalled that new laws limiting the use of non-disclosure agreements in resolving sexual harassment matters will come into effect on 1 July this year. These changes will be upon us quickly, and employers will benefit from proactive planning.
The Victorian government has announced that the Restricting Non-disclosure Agreement (Sexual Harassment at Work) Act 2025 (Act) is intended to commence on 1 July 2026 (although this date is yet to be formally proclaimed). This is slightly later than first anticipated, with the government indicating more time will allow for implementation (including preparation of guidance material and the mandatory information statement).
As a refresher and set out in our article last year about these upcoming changes, the Act is intended to reduce the incidence of non-disclosure agreements (NDAs) being used to conceal workplace sexual harassment, while also protecting and empowering workers who experience workplace sexual harassment. It seeks to achieve this by:
- Requiring several preconditions to be met before parties can enter an enforceable ‘workplace NDA’, including that:
- the complainant must request to enter into the NDA, and it must be the complainant's ‘express wish and preference’ to do so;
- after requesting the NDA but before entering into it, the complainant must receive a copy of a mandatory information statement;
- the complainant must have at least 21 days to review the NDA;
- each party must acknowledge, through an approved form, that the preconditions have been met.
- Preventing an employer or respondent from exerting undue influence or pressure on a complainant to enter, or request to enter, an NDA.
- Permitting complainants to make ‘permitted disclosures’ despite the existence of an NDA, including disclosures to Victoria Police, health and legal professionals, government authorities and investigation bodies.
- Introducing a ‘breach notice’ regime, which allows a complainant to give written notice to other parties if any preconditions are not met. If not addressed by the recipient of the notice within 30 days, the preconditions are taken not to have been met and the NDA is rendered unenforceable.
- Allowing the complainant to terminate an NDA after a minimum of 12 months from signing, even where preconditions were met. However, if an NDA is unenforceable or terminated, this does not affect the validity or enforceability of the rest of the agreement or any broader settlement agreement (e.g. a release from liability remains valid).
There is an important body of work for employers to be undertaking now in order to best position themselves when the Act takes effect. At a minimum, HR/ER and legal teams should be trained in the new requirements to prevent inadvertent breaches of the strict preconditions when negotiating NDAs. This could be supported with a checklist of the relevant preconditions. Employers should also take the time now to review existing policies, procedures and guidelines to ensure they are compliant with the new rights to be afforded to complainants. Template settlement agreements and NDAs should also be reviewed carefully and updated to ensure compliance with the Act while affording employers adequate levels of protection and flexibility where appropriate.
As we work with our clients on these matters, a number of complex issues related to the application of the Act are emerging, including management of NDAs where alleged sexual harassment is not the only complaint (as is often the case).
Who does this affect?
While the Act only has strict legal application in Victoria, in our view it presents a shift in the approach to the resolution of sexual harassment matters at a national level. We are already seeing a greater focus on these issues across all States and Territories, including complainants outside Victoria seeking to negotiate NDAs compliant with the Act. National employers will be well served by considering their preferred position in resolving sexual harassment matters across jurisdictions, particularly in light of increased attention from unions and potentially safety regulators.
If you would like more information or assistance in assessing your organisation’s required next steps, please reach out to your Employee Relations & Safety contact.
