Prohibiting Pay Secrecy
From 7 June 2023 in Australia employees gained the right to share information about their income and seek information about the pay of other employees when amendments to the Fair Work Act introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 came into effect.
Employees can now share information about their pay and the employment terms and conditions that would be needed to work out their pay, such as their hours of work. They can also ask other employees (with the same or a different employer) about their pay and employment terms and conditions that would be needed to work out their pay.
Employees cannot be forced by anyone to divulge information about their pay. However, they have a choice and can share details with others and try to find about the pay of other employees notwithstanding any term in an employment agreement that purports to restrict that right.
Employees can also exercise these rights after they leave their employment.
The changes seek to increase transparency and promote equality when it comes to employee remuneration.
Employees are now free to ask their co-workers about their pay and terms of employment that affect their pay and also share details about their pay with others.
An employer who enters into an employment agreement with terms inconsistent with the new right, the contract of employment will contravene the Fair Work Act.
Employers cannot take adverse action against an employee because of these rights, or to prevent an employee from exercising these rights.
The new rights apply where employment agreements:
- are entered into on or after 7 December 2022, or
- are entered into before 7 December 2022 where the contract does not include pay secrecy terms that are inconsistent with these rights, or
- are entered into before 7 December 2022 with pay secrecy terms that are inconsistent with these rights, but only after the agreement is changed any time after 7 December 2022.
Pay secrecy terms in a fair work instrument such as an award or enterprise agreement have no effect and cannot be enforced after 7 December 2022. This applies regardless of whether the instrument was made before, on, or after this date.
It will be interesting to see how employees respond to this new right particularly when it comes to bonus time and annual salary reviews this year.
