Secure Jobs, Better Pay Bill: What changes are being made to pay secrecy clauses?

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 seeks to introduce some significant changes to enterprise bargaining in Australia. Importantly, it also proposes a series of amendments designed to promote job security, flexibility and equality for individual employees.

Trent Hancock has written a series of summaries looking at some of these proposed amendments to the Fair Work Act 2009 (Cth) (FWA) and how they might impact employees. 

One key area of change in the proposed amendments to the Fair Work Act 2009 (Cth) (FWA), is with regards to pay secrecy clauses.

What is a pay secrecy clause?

Pay secrecy clauses are a clause in an employment contract that prohibits employees from sharing their salaries. They are typically used to stop co-workers comparing their salary deals and pushing for pay rises and are particularly common in industries that offer discretionary incentives and bonuses.

Presently in Australia, employers can legally include pay secrecy clauses in employment contracts. Employees who breach a pay secrecy clause in their contract can face disciplinary action including warnings and even dismissal for breach of contract.

What is going to change?

As part of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022, a new section 333B will be included which will make it a workplace right for employees to ask each other about, and disclose, their remuneration and any associated terms (such as hours of work). As a workplace right, an employee is protected from adverse action by asking these questions or making these disclosures.

As noted in the Explanatory Memorandum, this new provision will allow employees to ask one another about and to disclose their remuneration and relevant conditions. Employees would be able to use this information to assess whether their remuneration is fair and comparable to that of other employees in the same workplace or industry. This will allow employees greater bargaining power, reduce actual or perceived inequality, and increase transparency around gender pay discrepancies.

A new section 333C will also render any  Bias having no effect and section 333D will prohibit an employer from entering into an employment contract with an employee containing such a clause. This will also be a civil remedy provision meaning a penalty can be imposed on an employer if it is breached.

Disclaimer: This article should not be construed as legal advice and is not intended as such. If readers wish to obtain advice about anything contained in this article, they should speak with a lawyer and discuss their individual circumstances.