NDA Restrictions in Sexual Harassment Cases: What Victoria’s New Laws Mean for Employers

From 1 July 2026, Victoria’s Restricting Non-Disclosure Agreements (Sexual Harassment at Work) Act 2025 fundamentally changes how employers can handle settlements in sexual harassment cases. If you operate in Victoria—or employ Victorian workers remotely—you need to understand what this law does, what it prohibits, and how to revise your settlement practices now.

The Problem the Law Solves

Historically, employers have used non-disclosure agreements (NDAs) to keep sexual harassment settlements confidential. This protected the company’s reputation and often prevented public disclosure of the perpetrator’s identity or the amount of compensation paid. But victim-survivors argue this silences them and shields abusers.

Victoria’s new Act treats NDAs in sexual harassment matters differently from other workplace confidentiality agreements. The default is now transparency, not confidentiality.

Who This Applies To

The Act applies to:

• All employers operating in Victoria, regardless of company size
• All employees, contractors, and workers in Victoria
• NDAs entered into after 1 July 2026 (existing agreements are unaffected)
• Settlements arising from sexual harassment complaints or claims
• Note: The Act does NOT restrict NDAs for other workplace matters (IP theft, confidential business information, etc.)

Key Restrictions Under the New Law

1. NDAs Are No Longer the Default

Before 1 July 2026: Employers could use NDAs routinely to keep harassment settlements confidential.

From 1 July 2026: An NDA is only enforceable if the worker (victim) explicitly requests it in writing. The burden is now on the worker to ask for confidentiality, not on the employer to impose it.

2. Mandatory Information Statement and Review Period

Before signing any NDA, the worker must receive:

• A written statement explaining their rights under the Act
• Information about what they can and cannot disclose under the NDA
• A mandatory review period (at least 14 days, or as agreed) to consider whether to sign

Employers cannot pressure or coerce the worker to waive this review period.

3. What Workers Can Disclose

Even if an NDA is signed, the worker retains the right to:

• Report the harassment to Victoria Police, the police force of another state or territory, or the Australian Federal Police
• Speak to a registered medical practitioner, registered psychologist, or legal practitioner
• Speak to certain government bodies (e.g., the Fair Work Commission, Fair Work Ombudsman)
• Disclose to a support worker, counsellor, or victim advocate
• Disclose to an immediate family or household member (subject to a clause requiring the recipient to keep it confidential)

Workers cannot be penalised or sued for making these disclosures, even if the NDA says they can be.

4. Workers Can End the NDA After 12 Months

If a worker signed an NDA to settle a sexual harassment claim, they can end the agreement by giving notice to the employer after 12 months has passed. Once the NDA ends, the worker is free to disclose the harassment, the settlement amount, the perpetrator’s name, or any other detail.

What This Means for Employers

1. Lower Settlement Amounts

Previously, employers could offer larger compensation in exchange for confidentiality—the confidentiality had value to the company. Now that workers can break the NDA after 12 months or disclose through permitted channels, employers may reduce settlement offers because confidentiality is no longer guaranteed.

2. Reputational Risk is Now Permanent

You can no longer assume a settlement will keep a harassment case private. Plan for the possibility that:

• The harassment complaint and the worker’s identity may become public after 12 months
• The perpetrator’s identity may be disclosed to police, regulators, or the public
• The settlement amount may become known
• Journalists, review sites, or social media may pick up the story

3. Policy Updates Required

Review and update your Sexual Harassment, Grievance, and Settlement policies to:

• Remove language suggesting NDAs are mandatory or will be imposed
• Explain the worker’s right to request an NDA (or not)
• Clarify what can be disclosed under exceptions (police, medical, legal professionals)
• Include the mandatory information statement and review period requirements
• Document that the worker agreed (or declined) an NDA in writing

4. Consider Alternative Confidentiality Mechanisms

While NDAs are now restricted, you can still:

• Offer a larger settlement amount to encourage voluntary confidentiality (but not require it)
• Use other legal tools for non-harassment matters (IP, trade secrets, etc.)
• Focus on fixing systemic harassment issues rather than buying silence

Step-by-Step: Handling a Sexual Harassment Settlement from 1 July 2026

1. Accept the complaint and conduct a fair investigation—see our guide Workplace Investigations: Procedural Fairness Guide for Australian Employers.
2. Offer a settlement (amount is up to you and the worker).
3. Ask if the worker wants an NDA—make clear it’s optional and their choice.
4. If they say yes:
   • Provide a written information statement (template available from Victorian Govt)
   • Give them at least 14 days to consider
   • Require them to sign a written acknowledgment that they received the statement and had time to review
   • Have them sign the NDA
5. If they say no:
   • Accept the settlement without an NDA
   • Document their decision in writing

Practical Compliance Checklist

• [ ] Update HR policies to reflect the new Act
• [ ] Review existing templates for settlement agreements and NDAs
• [ ] Brief your leadership and HR team on the new rules
• [ ] Create a mandatory information statement (or use the Victorian Govt template)
• [ ] Document all settlement decisions and whether an NDA was offered/declined
• [ ] If you operate nationally, consider applying similar practices to other states (moves toward uniformity)
• [ ] Adjust your budgeting for sexual harassment settlements—assume potential public disclosure

Industry Note: Is This Coming to Other States?

Victoria is the first state to introduce this law. Other states may follow. Even if you don’t operate in Victoria, watch for similar legislation in NSW, Queensland, and WA. Fair Work Centre recommends employers adopt these practices nationally now rather than waiting for state-by-state changes. Visit our HR Best Practice hub for more guidance on managing workplace risks.

Who Can Help?

If you’ve settled a sexual harassment claim and need to review your NDA compliance, or if you’re facing a new claim, Fair Work Centre can advise on fair settlement practices, documentation, and policy updates. Our employment lawyers have experience with sensitive harassment cases and can guide you through the new rules. Explore our membership plans to access unlimited advice sessions with employment law specialists.