News update: Changes to confidentiality clauses in settlement agreements

The Department for Education (DfE) has issued further updates to the Academy Trust Handbook and the Guide to Academy Trust Severance Payments of which notably impact on confidentiality clauses within settlement agreements with immediate effect. 

While the salary threshold for requiring prior DfE approval of severance packages has risen from £150,000 to £174,000, the requirement to report on non-statutory/non-contractual elements of the settlement that are above £50,000 remains. 

The key changes relating to confidentiality clauses are that they: 

• Must not restrict an employee’s right to make protected disclosures (whistleblowing) under the Public Interest Disclosure Act 1998. 
• Are now regarded as novel, contentious or repercussive, meaning trusts must seek DfE approval before including them. 
• Must not prevent the DfE from obtaining the information it needs to review and assess severance payments. 

The Confederation of School Trusts (CST) is seeking clarification from the DfE on the second bullet point as confidentiality clauses have historically been used in settlement agreements and therefore may not, in practice, always constitute novel, contentious or repercussive arrangements. 

For Academy Trust’s, this represents a tightening of oversight on confidentiality terms in settlement agreements. Trusts intending to use such clauses should review their current settlement templates and seek advice before proceeding. 

A full summary of changes with effect from 22 October can be found here: DfE Update Academies: 22nd October 2025.

The revised guidance on Severance Payments and the Academy Trust Handbook can be found here: Guide to Academy Trust Severance Payments and Academy Trust Handbook 1 September 2025

For confidential advice on implementing the above changes, please contact us at [email protected] for a confidential chat with our senior team about how Edwin People can support your School or Trust.