For many employers, confidentiality has been a standard feature of workplace settlement agreements.
A dispute is resolved. A deed is signed. Both parties agree not to discuss what happened. The organisation closes the file and moves forward.
From 1 July 2026, that approach can no longer be treated as routine in Victorian workplace sexual harassment matters.
Victoria’s new laws significantly restrict when a non-disclosure agreement, commonly known as an NDA, can prevent a worker from speaking about their experience of workplace sexual harassment. They also apply to some non-disparagement clauses, not just documents specifically labelled as NDAs.
The practical message for employers is clear: confidentiality cannot simply be inserted into the usual settlement deed and presented as part of the deal.
More importantly, resolving an individual claim does not remove the organisation’s responsibility to understand what happened, address any ongoing risk and consider what needs to change.
Victoria has not banned every NDA
It is important to get the headline right.
Victoria has not prohibited every NDA connected with a workplace sexual harassment matter. Instead, the Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025 places strict limits on when particular confidentiality restrictions can be used and enforced.
The new rules apply to NDAs entered into after 1 July 2026. They cover agreements that prevent a complainant from:
- speaking about their experience of workplace sexual harassment
- naming the person who allegedly harassed them, where that person was 18 or older at the relevant time
- making statements that would otherwise be prevented through a non-disparagement clause
An NDA may be a standalone agreement, but it can also appear as a confidentiality or non-disparagement clause within a broader settlement deed. Calling the clause something else does not avoid the new requirements.
Confidentiality around the amount of compensation paid can still be requested without satisfying the same preconditions. Different rules also apply to protecting the identity of an alleged harasser who was under 18 at the time.
This distinction matters. Employers should not assume every confidentiality provision is prohibited, but they also should not assume their existing deed templates remain suitable.
Does the law apply only to Victorian employers?
No.
The relevant question is not simply where the employer’s head office is located.
The Victorian rules may apply where:
- the complainant usually works in Victoria
- the complainant works across jurisdictions but is usually based in Victoria
- the employer is interstate but has a worker who usually works or is based in Victoria
- the worker has no usual work jurisdiction, but the employer’s principal place of business is in Victoria
- in some circumstances, the alleged conduct occurred in Victoria
The rules can apply to workers, former workers and volunteers.
Consider a national business headquartered in Sydney that employs a manager who is ordinarily based in Melbourne. If the manager later resolves a workplace sexual harassment complaint through a settlement deed, the business should not assume its NSW headquarters take the agreement outside the Victorian legislation.
National employers now need to identify the worker’s employment connection before relying on a standard national deed.
The complainant must raise confidentiality
This is the most significant practical change.
The complainant must initiate the request for an NDA covering their workplace sexual harassment experience. The employer, the alleged harasser and their legal representatives cannot ask or suggest that the complainant enter into one.
The worker does not need to use the term “NDA”. A request for privacy or confidentiality may be enough, and it may be made verbally or in writing. The key point is that the request must come from the complainant.
That changes how settlement discussions need to be conducted.
Language such as the following may create problems:
- “Our offer is subject to the usual confidentiality terms.”
- “We would require the matter to remain confidential.”
- “This settlement amount includes confidentiality.”
- “We can provide a reference if the deed includes non-disparagement.”
- “Would you like us to include confidentiality?”
The last example may appear neutral, but it still introduces the NDA as an employer-led option. The safer practical position is to avoid raising confidentiality about the worker’s experience and allow the complainant or their representative to initiate that discussion.
This is not a small wording adjustment. It requires a change in negotiation practice.
What conditions must be met?
Where a complainant asks for an NDA, the employer cannot move directly to signing.
Six preconditions must be met before the NDA can be enforced against the complainant:
- The complainant must request the NDA.
- Entering the NDA must genuinely reflect the complainant’s choice and preference.
- The complainant must receive the prescribed NDA information statement before entering the agreement.
- The complainant must receive at least 21 days to review the NDA and have the opportunity to obtain legal advice.
- All parties must sign the approved acknowledgement confirming the relevant preconditions have been met.
- The complainant must not be pressured or unduly influenced to request or sign the NDA.
The agreement must also be written in plain language. Dense legal wording that an ordinary person would struggle to understand is inconsistent with the new framework.
The complainant may ask to shorten or waive the 21-day review period. The employer cannot initiate that request or pressure the complainant to proceed sooner.
Official Victorian guidance gives examples of conduct that may amount to undue influence, including:
- offering more money if the worker requests an NDA
- offering less money if they do not
- withholding a work reference unless the worker requests confidentiality
- threatening the worker’s future employment prospects
- linking visa renewal to signing an NDA
These examples reinforce a wider point. An employer cannot indirectly purchase confidentiality through the structure of its settlement offer.
Employers will need evidence of the process, not just a signed deed
Historically, an employer may have treated the signed settlement agreement as the main evidence that both parties accepted the terms.
Under the new Victorian framework, the process leading to the NDA matters just as much as the final document.
Employers should retain clear records showing:
- when and how the complainant requested confidentiality
- what information the complainant asked to keep confidential
- when the prescribed information statement was provided
- when the draft NDA was supplied
- how the 21-day review period was calculated
- whether the complainant independently requested a shorter period
- whether the complainant had an opportunity to obtain legal advice
- when each party signed the approved acknowledgement
- the final signed agreement
The aim is not paperwork for its own sake. It is to ensure the organisation can demonstrate that confidentiality genuinely reflected the complainant’s choice.
If a complainant believes the preconditions were not met, they can issue a formal breach notice. An employer wishing to contest the notice must apply to the Industrial Division of the Magistrates’ Court of Victoria within 30 days. If the employer does not apply, the preconditions are taken not to have been met and the relevant NDA terms will not be enforceable against the complainant.
A signature alone will not answer the question of whether the process complied with the law.
Even a compliant NDA does not create complete silence
Employers also need to understand that a valid NDA has limits.
A complainant may still make certain permitted disclosures, regardless of what the deed says. Depending on the type of information being disclosed, this can include disclosures to:
- lawyers
- medical practitioners and mental health professionals
- Victoria Police
- WorkSafe Victoria
- trade union representatives
- family members or friends providing personal support, where they agree to keep the information confidential
- an employer or prospective employer for the purpose of obtaining or maintaining work
- particular regulators and integrity bodies
- financial and tax advisers in relation to settlement payments
Different limits apply to different recipients. For example, some bodies may receive information about the experience but not the alleged harasser’s name, the employer’s name or the settlement amount.
Employers should therefore stop describing compliant NDAs as creating absolute confidentiality. They do not.
The complainant may end the NDA after 12 months
The new laws also change how long these restrictions may last.
For agreements entered into after 1 July 2026, a complainant may terminate the relevant NDA after 12 months by giving at least seven days’ written notice using the approved form.
They do not need to provide a reason. They do not have to repay the settlement amount, and the employer cannot require compensation for ending the NDA.
If the agreement was mutual, ending it may also release the employer from the corresponding confidentiality restriction. That does not mean the employer should immediately start discussing the matter.
Privacy obligations, procedural fairness, defamation risk, employment obligations and the rights of other people involved may still apply. Employers receiving a termination notice should obtain legal advice before making any disclosure.
The rest of the settlement agreement may continue to operate. Confidentiality concerning the settlement amount may also remain in place.
Mixed complaints create an extra layer of complexity
Workplace complaints rarely arrive in clean legal categories.
An employee might raise concerns involving:
- workplace sexual harassment
- bullying
- sex-based discrimination
- victimisation
- exclusion from work
- unreasonable behaviour
- inappropriate management conduct
A settlement deed may address all of these allegations together.
Under the new Victorian rules, confidentiality covering the sexual harassment component may be unenforceable while restrictions concerning unrelated allegations continue to operate.
For example, an employee may allege repeated bullying, one sexually suggestive comment and retaliatory behaviour after raising concerns. A single broad clause stating that the employee must not discuss “the complaint or any circumstances surrounding it” may not operate consistently across each allegation.
Employers and their advisers should identify:
- which allegations involve workplace sexual harassment
- which information relates to other misconduct
- whether the complainant has independently requested confidentiality
- what information any proposed NDA is intended to cover
- what carve-outs are required
A broad, standard confidentiality clause is no longer a sensible substitute for careful drafting.
Settlement does not replace investigation
This is where the significance of the reform extends beyond settlement documents.
An employer cannot enter an NDA with the respondent that prevents the employer from investigating workplace sexual harassment. Where an allegation is substantiated, an NDA also cannot prevent the employer from disclosing relevant information to a future employer of the respondent.
This does not create a general obligation to disclose allegations to another employer. Any disclosure decision would need careful legal consideration.
It does, however, reinforce an important principle:
An employer cannot contract away its responsibility to understand and manage workplace risk.
A financial settlement may resolve the complainant’s individual claim. It does not necessarily answer:
- whether the allegation should still be investigated
- whether other employees may have experienced similar behaviour
- whether the respondent remains in the workplace
- whether management missed earlier warning signs
- whether reporting pathways were trusted and accessible
- whether power imbalances contributed to the risk
- whether policies, training or supervision need to change
- whether the organisation has met its positive duty and psychological health obligations
Victorian employers already have duties under equal opportunity and health and safety laws to prevent and respond to workplace sexual harassment. The NDA reforms sit alongside those obligations rather than replacing them.
This is why an employer should not automatically close an investigation because the individual dispute has settled.
The right question is not simply, “Has the deed been signed?”
It is, “What does the organisation still need to understand, address and prevent?”
What should employers do now?
1. Review standard settlement documents
Check deeds of release, settlement agreements, confidentiality clauses and non-disparagement provisions.
Look for broad wording that may capture workplace sexual harassment, even where the document does not use the term NDA.
2. Change settlement negotiation practices
Managers, HR teams and external advisers should understand that they cannot introduce or suggest confidentiality about the complainant’s experience.
This includes avoiding settlement offers that place a higher financial value on silence.
3. Establish a documented NDA process
Where a complainant requests confidentiality, the business needs a reliable process covering:
- the complainant’s request
- the prescribed information statement
- the review period
- access to legal advice
- the approved acknowledgement
- plain-language drafting
- document retention
4. Identify Victorian connections early
National employers should determine where the worker usually works or is based before applying a standard interstate or national agreement.
5. Separate mixed allegations
Do not treat a complaint involving harassment, bullying and discrimination as one undifferentiated issue. Identify which allegations are subject to the Victorian NDA restrictions.
6. Review employment contracts
Broad confidentiality provisions in employment contracts cannot prevent a worker from speaking about their workplace sexual harassment experience or naming an alleged adult harasser.
7. Keep settlement and organisational risk decisions separate
Resolving the claim does not automatically determine whether an investigation, risk review or further workplace action is needed.
Consider each decision on its own merits.
8. Review your broader Respect@Work framework
Use this change as a prompt to check whether:
- employees know how to raise concerns
- leaders know how to respond
- reporting pathways are trusted
- workplace risks have been assessed
- training reflects real workplace scenarios
- concerns are addressed consistently, regardless of seniority
A policy is useful, but it does not prevent harm on its own. Employers need systems that work in practice, leaders who recognise issues early and a clear process for responding when concerns are raised.
The practical shift for employers
Victoria’s new workplace sexual harassment NDA laws are not simply about changing a clause in a settlement deed.
They change the starting assumption.
Confidentiality is no longer an ordinary employer-driven condition of resolving a workplace sexual harassment complaint. It must reflect the complainant’s genuine choice, follow a prescribed process and operate within clear legal limits.
For employers, that requires more disciplined complaint handling, clearer settlement processes and a stronger separation between resolving an individual claim and managing the wider workplace risk.
Handled well, this is not just a compliance exercise. It is an opportunity to build processes that are fairer, more transparent and more likely to identify the workplace issues that need attention before they repeat.
A settlement may resolve an individual claim, but it does not necessarily resolve the workplace risk behind it.
DreamStoneHR supports employers to manage sensitive workplace complaints, conduct independent and procedurally fair investigations, review reporting and response processes, and strengthen respectful workplace practices.
Where legal settlement documents are required, we can work alongside your employment lawyer to ensure the HR, investigation and organisational response remains clear and coordinated.
Contact DreamStoneHR to discuss your workplace complaint, investigation or Respect@Work framework.
