Transparency is the Default and Confidentiality is the Exception: Victoria’s New Laws Restricting NDAs in Workplace Sexual Harassment

The Victorian Government’s recent determination to enact workplace reform continues, with the commencement of laws prohibiting disclosure agreements (NDAs) being brought forward from 1 November to 1 July by proclamation.

From 1 July 2026, the Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025 (Vic) (the Act) will fundamentally change how NDAs relating to workplace sexual harassment can be used in Victoria.

The Act will restrict the circumstances in which confidentiality terms can be entered into, the terms they may contain and their enforceability against complainants. Out‑of‑court settlements can still resolve disputes around sexual harassment. However, employers will need to adjust their practices and review the wording of confidentiality obligations in their settlement agreements.

The Act only applies to an agreement that would restrict disclosure of material information about workplace sexual harassment, including alleged workplace sexual harassment. While the application of the prohibition is limited to claims of workplace sexual harassment, it operates broadly to capture sexual harassment, however that may occur in connection with the workplace.

The definition of "worker" encompasses employees, contractors, commission-based workers and volunteers, while “workplace” captures any location that a person attends for the purpose of carrying out any function of their work. A complainant and/or perpetrator accordingly need not be an employee for the conduct to be captured.

The definition of NDA is drawn widely to include any contract, agreement, or term that has the purpose or effect of preventing disclosure of information about workplace sexual harassment and expressly encompasses non-disclosure and non-disparagement clauses in settlement agreements.

A “workplace” NDA will be captured by the Act in relation to sexual harassment if:

• it relates to the disclosure of material information about workplace sexual harassment or alleged sexual harassment;
• the complainant is a party to the agreement; and
• the complainant's employer and/or the perpetrator is also a party to the agreement.

"Material information" includes the identity of the perpetrator and any details about the conduct constituting the sexual harassment.

However, the amount of financial compensation payable in respect of the sexual harassment, and the identity of the perpetrator where the perpetrator is under 18 years of age at the time of the harassment, can generally be restricted under the Act.

Under the Act, a workplace NDA is only enforceable against the complainant if a series of mandatory preconditions are satisfied.

These preconditions are:

• The complainant must have requested to enter into the NDA, and it must be the complainant's express wish and preference to do so. It is no longer permissible for employers or perpetrators to propose or initiate NDAs as a condition of settlement – the request has to come from the complainant;
• After requesting the agreement, the complainant must be given a copy of a “workplace non‑disclosure agreement information statement” [1];
• The complainant must be given at least 21 days to review the agreement before entering into it, although the complainant may request a shorter review period or waive the review period entirely at their own initiative; and
• Before entering into the agreement, each party must sign a form acknowledging that the preconditions have been met.

Critically, neither the employer, the perpetrator, nor any person acting on their behalf may exert undue influence or undue pressure on the complainant in relation to the complainant's decision as to whether to enter, or to request to enter, into the agreement.

Even where the preconditions are satisfied, an agreed NDA must not prevent a complainant from making "permitted disclosures" and such a restriction will be unenforceable to the extent that it purports to do so.

“Permitted disclosures” consist of the disclosure of material information to certain persons and bodies. This includes medical and legal practitioners, mental health professionals, an employer or prospective employer of the complainant (for purposes of obtaining or maintaining work), a friend or family member who agrees to maintain confidentiality, along with certain government bodies such as the Fair Work Commission, Australian Human Rights Commission and the Victorian Equal Opportunity and Human Rights Commission.

The Act introduces a streamlined dispute mechanism for challenging non‑compliant NDAs. A complainant who believes the preconditions were not met may give written "breach notice" to each other party specifying the alleged deficiency. The employer then has 30 days to apply to the Industrial Division of the Victorian Magistrates’ Court for an order confirming that the preconditions were met and the NDA should be upheld. If the employer does not apply, the preconditions are deemed not met and the confidentiality term is no longer binding.

The breach notice mechanism gives complainants a relatively straightforward pathway to challenge the enforceability of workplace NDAs. This low-barrier mechanism could generate a body of disputes, particularly where complainants later come to regret having entered into an NDA or where the process was not meticulously documented.

A complainant may terminate a workplace NDA, even where the preconditions have been met, at any time once the agreement has been in place for 12 months, by giving at least 7 days' written notice. This right cannot be overridden by the terms of the agreement.

Despite terminating the confidentiality terms, the remainder of the terms of agreement and any compensation obligations will remain enforceable. Relevantly, while a complainant will not be restrained from disclosing details of conduct alleged by them, they will not be permitted to disclose confidential terms relating to any settlement payments made to them.

The Act addresses circumstances where the employer and the perpetrator enter into an NDA, where the complainant is not a party. Such agreements are unenforceable against the employer to the extent they would prevent the employer from conducting an investigation into workplace sexual harassment. Further, if the employer substantiates the complainant's allegations, the NDA is unenforceable to the extent it would prevent the employer from disclosing material information to a prospective employer of the perpetrator. This will be relevant to any non-disparagement obligations under a settlement agreement entered into with a perpetrator who, for example, may have brought an unfair dismissal claim in respect of their dismissal due to sexual harassment conduct.

A term of an employment contract is not enforceable against a worker to the extent it would prevent the worker from disclosing material information about workplace sexual harassment. While such terms would be unusual, the provision is directed at blanket confidentiality clauses in employment contracts that might otherwise be relied upon to silence complainants.

Victorian employers, along with national employers who employ people in Victoria or with a relevant connection to Victoria, must ensure that those responsible for managing the resolution of workplace sexual harassment claims are fully apprised of the restrictions governing the use of NDAs in Victoria.

Employers should review and update their template settlement agreement or deed precedents to ensure compliance with the Act for any claims resolved from 1 July 2026.

Employers should be mindful of the fact that:

• They cannot propose confidentiality as a term of a settlement agreement – a confidentiality term may only be requested by a complainant.
• Employers and their representatives must not exert undue influence or pressure on the complainant's decision to request or enter into an NDA. Conduct that may previously have been regarded as standard negotiation tactics (e.g., offering a higher settlement sum contingent on confidentiality, or emphasising reputational risks to the complainant) may now be scrutinised as exerting undue pressure on the complainant's decision to request an NDA.
• Each of the statutory pre-conditions must be met as a failure to satisfy any will render the NDA unenforceable, and an NDA will be unenforceable after 12 months even if the pre-conditions are met.
• Given the extensive list of “permitted disclosures”, even where the pre-conditions are met, the practical scope of what an NDA can restrict is significantly narrowed. This will create greater visibility for regulators and may lead to more systemic investigations.

This article was co-authored by Aneisha Bishop, a Lawyer in our Melbourne office.

References:

[1] A copy of the Workplace Non-Disclosure Agreement Information Statement published by the Victorian Government is available online here: https://www.vic.gov.au/sites/default/files/2026-06/NDA-Information-Statement-FINAL.pdf

The views expressed in this article are general in nature only and do not constitute legal advice. Please contact us if you require specific advice tailored to the needs of your organisation.

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