In brief

On 1 July 2026 the Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025 took effect in Victoria. The new law restricts use of non-disclosure agreements (NDAs) in matters involving workplace sexual harassment.

Under the new legislation, an NDA will only be permitted where it is requested by the complainant, written in plain language, preceded by a mandatory information statement and review (cooling off) period and not affected by undue influence or pressure.

The reforms also enable a complainant to make certain permitted disclosures and terminate an NDA after one year from the date on which the NDA was entered into.

This is an important shift in the way that sexual harassment matters in Victoria can be settled and reflects a broader national focus on NDAs in workplace sexual harassment and discrimination matters. Employers must be aware of and follow these NDA requirements where a matter has a Victorian connection. 

Key takeaways

• For an NDA in relation to a matter involving workplace sexual harassment to be valid and enforceable certain preconditions must be satisfied.
• Workers cannot be unduly influenced or pressured into signing an NDA involving workplace sexual harassment.
• Workers, not employers, must request the NDA.
• Once one year has passed from the date on which the NDA was entered into, the complainant has a right to terminate the NDA meaning that they may then disclose their experience of sexual harassment.
• Clauses stipulating that financial compensation paid to a worker under an NDA is confidential will remain valid and survive termination of an NDA.  However, clauses requiring repayment of a financial settlement if an employee exercises their right to terminate the NDA are expressly not permitted.  
• The changes have potentially broad reach as the Act applies to NDAs where the workplace sexual harassment “has a connection to” Victoria.
• It is an opportune time to review your sexual harassment policies, procedures and practices. Given the limitations on being able to settle these cases that now apply, a renewed focus on preventing sexual harassment in your workplace is paramount.
  
  

In depth

What is a non-disclosure agreement (NDA)?

A non-disclosure agreement is defined broadly in the Act to mean a contract or other agreement, or any part or term of a contract or other agreement, the purpose or effect of which is to prevent a person who is party to the agreement from disclosing certain information, regardless of whether that purpose or effect is achieved directly or indirectly.

The Act expressly includes non-disclosure clauses and non-disparagement clauses in settlement agreements within the definition of an NDA.

What are the new requirements that must be satisfied?

The preconditions that must be met for an NDA to be valid and enforceable include:

• The complainant, not the employer, requests the NDA
• The NDA must be written in plain language.
• The complainant is provided with the workplace non‑disclosure agreement information statement.
• The complainant is given a “cooling off” period of at least 21 days to review the agreement before entering into the agreement.
• Before entering into the agreement, each party to the agreement acknowledges that all preconditions have been met.
  
  

What will amount to a sufficient “connection to Victoria”?

Workplace sexual harassment is considered connected to Victoria if:

• The complainant usually works in Victoria; or
• If there is no jurisdiction in which the complainant usually works, the complainant is based in Victoria for the purposes of their work; or
• If there is no jurisdiction in which the complainant usually works or in which the complainant is based for work, the principal place of business of the complainant's employer is in Victoria; or
• If a connection to a particular jurisdiction is not otherwise established, the workplace sexual harassment occurs or allegedly occurs in Victoria.

The explanatory memorandum to the legislation clarifies that there is no intention to apply the new laws to sexual harassment that occurs in Victoria, if the employee usually works in another state.

There is no definitive definition of the term “usually” however the explanatory memorandum notes that the complainant’s work history over the preceding 12 months and the intentions of the worker and the employer will be relevant considerations is determining where a worker “usually” works. 

When can a complainant terminate a NDA?

The changes to the law do not apply retrospectively to NDAs that were made prior to 1 July 2026.

However, a complainant may terminate an NDA from one year after the date on which the NDA was entered into by giving written notice to the parties to the NDA. Written notice must be provided at least seven days prior to the date on which the NDA is to be terminated.

Importantly, with certain limited exceptions, other terms of a settlement agreement can continue to apply even if an NDA is terminated by the complainant. This means that a complainant can still be required to keep, for example, the amount of any settlement payment confidential. Careful and legally compliant drafting of settlement agreements will be crucial to ensure that this protection remains.

Can we recover a financial settlement if a complainant terminates the NDA?

No. The Act expressly provided that a term in a contract or other agreement that requires a complainant to repay a settlement agreement when the complainant exercises their right to terminate a NDA is unenforceable.

In line with the purpose of the legislation, these changes will mean that protection against disclosure of the alleged conduct cannot be guaranteed

We anticipate that this will have a material effect on the quantum of sums that are paid to settle sexual harassment cases.

Are these changes likely to be replicated in other States and Territories of Australia?

At this stage, only Victoria has moved to prohibit NDAs in sexual harassment cases. However, the Australian Human Rights Commission recommended in a June 2025 report that the Federal Government implement changes to limit confidentiality and non-disclosure agreements. Watch this space.