How much are you paid? Understanding the new pay secrecy provisions

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 represents one of the most significant changes to the Australian workplace relations landscape in over a decade.  One of the areas of reform has been introduced to prohibit pay secrecy.  Employees under these new provisions have an additional workplace right to share information or ask other employees about their pay and other terms and conditions of employment. 

Prohibiting pay secrecy

From 7 June 2023, pay secrecy terms cannot be included in employment contracts or other written agreements that were entered into on or after 7 December 2022.  The changes are designed to provide the opportunity for employees to understand more information about their remuneration with the aim of reducing the risk of discrimination and improving the gender pay gap.

Under the new provisions, employees and future employees have the right to share (or not share) information about:

·       their pay

·       their employment terms and conditions that would be needed to work out their pay, such as their hours of work

and/or ask other employees (with the same or a different employer) about their:

·       pay

·       employment terms and conditions that would be needed to work out their pay, such as their hours of work.

Importantly, employees can’t be forced to give this information to another employee if they don’t want to.  Employers are also not required to disclose information about other employees pay or terms and conditions of employment.  An employer cannot take adverse action against an employee if they exercise these rights. 

Understanding the workplace culture impacts of these changes

This would have to be one of the most interesting, if not unique additions to the reforms proposed from a workplace culture perspective.  Many workplaces will generally discourage open conversations amongst employees about pay and other terms and conditions of employment.  This for most workplaces is about protecting the confidentiality and privacy of employees.  It is commonly known that conversations at work about pay can often cause conflict amongst people who can become quickly aggrieved to learn that someone else is getting paid more than they are.  It is an issue that can become very difficult to manage from a practical perspective in the workplace. 

The new Part 7 – Prohibiting Pay Secrecy included in the Act will prevent employers from including pay secrecy clauses in employment contracts, enterprise agreements and other written agreements.  The reforms to the legislation in this area will prevent employers from subjecting employees to pay secrecy clauses in awards, employment contracts, enterprise agreements or other written agreements.  This will promote pay transparency and no doubt will result in some cultural shifts inside organisations that traditionally discourage these types of conversations amongst employees. 

We recommend that you

·       Review contracts of employment, enterprise agreements or other written agreements to remove any references to pay secrecy or terms designed to prevent employees from discussing their pay or other conditions of employment.

·       Review existing policies and procedures, including specifically Privacy and Code of Conduct policies to ensure there is nothing included that prevents employees from discussing their pay or asking other employees questions about pay or other terms and conditions of employment. 

·       Inform employees about the new workplace right they have to share information or ask other employees about their pay and terms and conditions of employment, explaining that they cannot be forced to provide this information if they don’t want to. 

Work with us

Humanify HR Consulting specialise in workplace relations and supporting organisations to ensure that their workplace arrangements are contemporary and fit-for-purpose.  To find out more about how we can support you with these new workplace relations changes please contact our team at hello@humanifyhr.com.au. You can also download a FREE copy of our Workplace Relations Calendar for 2023 that includes key changes to prepare for here:  Workplace Relations Calendar.

Important Disclaimer: The material contained in this article is provided as general information only. It is not, nor is intended to be legal advice. If you wish to take any action based on the content of this article we recommend that you seek professional advice.