For many employers, confidentiality clauses have long been a standard part of resolving workplace disputes. A complaint is made. The parties negotiate. A settlement deed is prepared. A confidentiality clause is included.
That familiar process has now changed significantly where workplace sexual harassment is involved. Since 1 July 2026, Victoria has restricted when non-disclosure agreements (NDAs) can be used in workplace sexual harassment matters.
This article deep-dives into the new laws and breaks down what employers really need to know.
The biggest change? Your business should not be the one asking for silence
Historically, an employer may have proposed a settlement deed containing broad confidentiality and non-disparagement obligations. The intention may not have been improper, and your business may simply have wanted certainty, privacy and a clean end to a difficult dispute.
However, under Victoria’s new NDA laws, that approach can create a serious problem. Where an NDA would prevent the complainant from talking about their experience of workplace sexual harassment, the employer, the respondent and their representatives cannot ask or suggest that the complainant enter into that type of NDA.
The request for an NDA must come from the complainant.
This means employers need to be particularly careful during settlement negotiations.
A proposal along the lines of:
“We can resolve this for $X, provided the matter remains confidential.”
may no longer be the routine negotiating position it once was.
Employers also need to be careful about linking the amount of a settlement to whether the complainant agrees to confidentiality. Offering more money in exchange for an NDA, or less money if the complainant does not request one, may raise concerns about undue influence or pressure.
Dealing with a workplace sexual harassment complaint now? Prosper Law can help your business assess the complaint, manage the investigation process and structure settlement discussions lawfully.
A worker asking for confidentiality does not automatically make the NDA valid
Even where the complainant requests an NDA, your business cannot simply add a confidentiality clause and move on. There are now several legal requirements that must be satisfied.
Broadly, the complainant must:
- initiate the request for the NDA;
- genuinely want confidentiality as their choice and preference;
- receive the prescribed NDA information statement before entering into the agreement;
- be given at least 21 days to review the NDA, unless they choose to shorten or waive that period;
- join the other parties in formally acknowledging that the relevant preconditions have been met; and
- not have been subjected to undue influence or pressure to request or enter into the NDA.
The NDA must also be written in plain language.
That 21-day period also deserves particular attention. An employer should not pressure the worker to shorten the review period simply because everyone wants the matter resolved quickly. The complainant may choose to shorten or waive the period, but that decision must come from them.
For your business, this makes the process just as important as the wording. A carefully drafted confidentiality clause will not fix a flawed negotiation process.
Can settlement agreements still be confidential?
Yes, but this is where the law becomes more nuanced. The new restrictions do not mean that every aspect of a sexual harassment settlement must become public. For example, an employer can still seek confidentiality over the amount of financial compensation paid.
There are also different rules in some circumstances, including where the respondent was under 18 at the time of the alleged harassment.
Rather than automatically using one broad clause stating that “the existence, circumstances and terms of this agreement are strictly confidential”, employers should think carefully about exactly what information genuinely needs protection.
There can be an important legal difference between:
- keeping the settlement amount confidential; and
- preventing a worker from speaking about the conduct that led to the settlement.
Before reusing an old deed of release or settlement agreement, have it reviewed. Standard confidentiality clauses may no longer be appropriate where workplace sexual harassment allegations are involved.
Even a valid NDA does not mean absolute silence
Another misconception employers should avoid is assuming that a valid NDA prevents the complainant from speaking to anyone – it does not.
The new legislation allows certain disclosures even where a valid NDA exists. Depending on the circumstances and the information being disclosed, a complainant may still be able to speak with people and organisations including lawyers, family and friends, medical and mental health professionals, Police, WorkSafe Victoria and more.
There may also be circumstances in which information can be disclosed to an existing or prospective employer for the purpose of obtaining or maintaining employment.
Different rules apply depending on the information being disclosed and who is receiving it. So even where your business has a legally compliant NDA, it should not be drafted or managed on the assumption that nobody can ever discuss what happened.
An NDA may not last forever
Perhaps one of the most significant changes is that, on or after the first anniversary of entering into a workplace NDA, the complainant can terminate the NDA to the extent that it restricts disclosure of the workplace sexual harassment and the identity of an adult respondent. Certain protected information, including the amount of financial compensation and the identity of a respondent who was under 18 at the relevant time, can still remain confidential. They must also give at least seven days’ written notice using the prescribed process.
Critically, the employee does not have to repay settlement money simply because they exercise that termination right, and an employer cannot require compensation merely because the NDA is terminated.
Other parts of the settlement agreement can continue to operate. For employers, this changes the value that can realistically be placed on long-term confidentiality when negotiating a settlement.
If your business previously viewed an NDA as permanent protection against the underlying circumstances ever being discussed, that assumption needs to be reconsidered.
What should Victorian employers do now?
If your business operates in Victoria, or employs workers who are usually based in Victoria, it is worth reviewing how sexual harassment complaints move from investigation through to resolution.
A sensible process may look something like this.
1. Receive and assess the complaint
Do not begin with assumptions about settlement or confidentiality. Consider any immediate safety issues, procedural fairness obligations and whether an investigation is required.
2. Investigate where appropriate
Do not use a confidential resolution with the respondent as a way of avoiding an investigation that should otherwise occur.
3. Consider settlement on its merits
If settlement is appropriate, negotiate the substantive resolution without automatically making the complainant’s silence part of the price.
4. Do not initiate the request for an NDA
If the complainant independently raises confidentiality, consider whether the statutory requirements can be satisfied. Employers, respondents and their representatives need to be careful not to suggest or pressure the complainant into requesting an NDA.
5. Follow the statutory process carefully
Where an NDA is requested, make sure the required information is provided, the appropriate review period is allowed, the necessary acknowledgements are completed and the complainant is not placed under undue pressure.
6. Draft narrowly and in plain language
Be clear about exactly what is confidential. Do not assume that an old settlement deed or standard confidentiality clause is still appropriate.
7. Keep appropriate records
If enforceability is later challenged, the process by which the NDA was requested, negotiated and entered into may become extremely important.
Remember: The consequences of getting the process wrong are not merely technical. If a complainant believes the statutory requirements were not satisfied, they may be able to challenge whether the NDA is enforceable against them.
There are formal procedures and strict timeframes that can apply if an employer wants to dispute that challenge. In practical terms, getting the process wrong can mean that the confidentiality protection your business thought it had negotiated is not actually enforceable.
Your business may need to rethink the entire process around resolving workplace sexual harassment complaints.
Need help with a workplace sexual harassment complaint?
If your business is dealing with a workplace sexual harassment complaint, investigation or proposed settlement, early legal advice can help you avoid costly mistakes.
The Victorian Government has also published guidance for employers and respondents that might be helpful as well.
Before proposing confidentiality terms or relying on an existing settlement template, speak with Prosper Law about whether the new Victorian NDA laws apply to your business and what steps you should take next.
Frequently asked questions
Can my business still use an NDA to settle a sexual harassment complaint?
Potentially, yes. However, where the NDA restricts what the complainant can say about their experience of workplace sexual harassment, strict legal requirements apply.
Critically, the complainant must initiate the request for the NDA and confidentiality must genuinely reflect their preference.
Can we offer more settlement money in exchange for confidentiality?
Employers should be extremely careful about doing this. Linking the amount of settlement money to whether a complainant requests an NDA may raise concerns about undue influence or pressure. The safer approach is not to make confidentiality something the complainant must “sell” in exchange for a better financial outcome.
Can the settlement amount still be confidential?
Yes. Confidentiality concerning the amount of financial compensation paid is treated differently from restrictions that prevent a complainant from discussing their experience of workplace sexual harassment.
This is one reason settlement deeds should be drafted carefully rather than relying on broad, standard confidentiality wording.
Separately, the reforms are not limited to settlement deeds. A confidentiality term in an employment contract may also be unenforceable to the extent that it prevents a worker from disclosing material information about workplace sexual harassment, subject to the Act’s rules concerning protected information. Employers should therefore review not only settlement templates, but also relevant confidentiality and non-disparagement provisions in employment documentation.
Can a complainant change their mind after signing an NDA?
Generally, an NDA covered by the new Victorian regime can be terminated by the complainant after 12 months, subject to the required notice process. Terminating the NDA does not ordinarily mean the complainant has to repay the settlement amount. Other parts of the settlement agreement may continue to apply.
Do the new rules only apply to businesses physically located in Victoria?
Not necessarily. The legislation can apply where there is a sufficient connection with Victoria, including in circumstances where the complainant usually works or is based in Victoria for work.
Interstate employers with Victorian employees should therefore not assume the reforms are irrelevant simply because their head office is located elsewhere.
Should we update our standard settlement deed?
Yes. Employers should review the confidentiality, non-disparagement and release provisions used in workplace disputes. A standard settlement clause designed for a general employment dispute may be inappropriate where the matter involves allegations of workplace sexual harassment.
More importantly, your business should also review how confidentiality is raised and negotiated, because an NDA that looks legally polished on paper can still be unenforceable if the required process was not followed.
Does the new law apply to old NDAs, or only new ones?
The new Victorian NDA laws generally apply to NDAs and other relevant agreements entered into on or after 1 July 2026. They do not generally operate retrospectively to invalidate NDAs or settlement agreements entered into before that date.
However, employers should still be careful when varying, replacing or entering into a new agreement after 1 July 2026 that relates to an earlier workplace sexual harassment matter. Depending on how the new agreement is structured, the new statutory requirements may apply.
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