No More Pay Secrecy - An Employee's Right to Discuss
May 29, 2023Have you ever wondered how your salary compares to that of your colleagues? Well gone are the days of pay secrecy in the workplace! Pay has often been a taboo topic with contractual clauses banning employees from discussing such information. While discussing pay and other employment conditions is discretionary (meaning the employee doesn't have to disclose such information), the passing of this bill now means employees have the right to ask at work.
Earlier this year, a bill was passed in Australia that now prohibits pay secrecy clauses within employee contracts. In simpler terms, employees now have the right to discuss their pay openly with colleagues. The prohibition became effective on 6 December 2022.
How common are pay secrecy clauses?
Typically, roles with bonuses and other incentives are known to contain pay secrecy clauses. Why? It allows employers to enhance their bargaining power and ultimately differentiate pay between employees without their knowledge. It's a more competitive model which can be influenced by supply, demand and an employee's negotiation skills. The problem, there's also evidence to suggest it's contributed to the gender pay gap and other unfair pay terms.
As of 6 December 2022, pay secrecy clauses in contracts became unenforceable.
Therefore, any contract created on 7 December 2022 or thereafter that includes such clauses may be considered unenforceable by Fair Work.
What does this mean for the employee?
This is actually great news for employees!
It's a progressive step in the right direction to improve gender equality within Australia. Historically, such clauses have been used to conceal pay differences between male and female employees.
Worried you might be in breach?
When was the last time you reviewed your contracts?
If you can't remember.... That's where Employii comes in!
It can often be hard for employers to recognise when they have breached legislation, especially with an abundance of changes set to roll out over the coming months. At Employii, we can review your contracts and issue new contracts (when required).
To reach out to the Employii team, contact us via email ([email protected]) or social media!
For more information on pay secrecy, head to the Fair Work website.
Author: Chelsea Finlay (HR Officer)
