Pay secrecy now prohibited under the Fair Work Act
With recent changes to the Fair Work Act that came into effect on 7 December 2022, Australian employers can no longer prohibit employees from disclosing their pay and workplace conditions to others.
This move from the Australian Government, which is partly intended to address the use of pay secrecy to conceal gender pay gaps, means employees are now free, if they choose, to discuss their pay with others without fear of adverse action from their employer.
In this week’s Akyra blog, we break down what this change will mean for both employers and employees.
Prohibition on pay secrecy clauses
As part of the Australian Government’s industrial relations reform package, employers are now prohibited from including pay secrecy clauses in employment contracts.
The Fair Work Act has now been amended to give all Australian workers the right to share (or not share) information about their pay and the terms and conditions of employment.
Prior to this change, employers were able to include pay secrecy clauses in employment contracts, preventing employees from disclosing this information to others.
What does this mean for employers?
This change means that employers can no longer include pay secrecy clauses in a worker’s employment contract – i.e. as of 7 December 2022, no employment agreement should have pay secrecy clauses.
Following this change to the Fair Work Act, employers cannot take adverse action against an employee for disclosing information regarding their pay or employment conditions.
This prohibition is enforceable by the Fair Work Ombudsman (FWO) which has the power to initiate court proceedings for any alleged breaches of this new prohibition, which could result in penalties to the employer.
Tips on how to handle workplace discussions surrounding pay and employment conditions will be the subject of an upcoming Akyra blog.
When do these changes come into effect?
For employment contracts entered into on or after 7 December, 2022, pay secrecy clauses should not be included as part of the terms and conditions of employment and, if they are, hold no validity.
Where existing employment contracts with pay secrecy clauses were entered into prior to 7 December 2022, those pay secrecy clauses hold no validity and cannot be acted on by an employer.
As of 7 June 2023, pay secrecy clauses cannot be included in employment contracts. Employers who include pay secrecy clauses after this date could face penalties.
Akyra’s key takeaways
- With recent changes to the Fair Work Act, employers will no longer be able include or enforce pay secrecy clauses in employment contracts
- This means employees now have the protected right to discuss their pay and employment conditions if they wish to do so
- For employment contracts dated on or after 7 December 2022, pay secrecy clauses are no longer valid or enforceable
- Employment contracts dated prior to 7 December, 2022 which include a pay secrecy will need to be amended to reflect these changes
NEED MORE INFORMATION?
Akyra can help your business to assist and support all your questions and concerns related to pay secrecy and employment contracts. Please contact Akyra on 07 3204 8830 or book a free 30-minute consultation for an obligation-free conversation.
Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.
Sources:
https://www.fairwork.gov.au/newsroom/news/secure-jobs-better-pay/pay-secrecy-job-ads-and-flexible-work#:~:text=Disclosing%20pay%20and%20workplace%20conditions,as%20their%20hours%20of%20work, https://www.fairwork.gov.au/pay-and-wages/pay-secrecy, https://theconversation.com/pay-secrecy-clauses-are-now-banned-in-australia-heres-how-that-could-benefit-you-195814
