Keeping quiet on pay is no longer OK

You would have to be living under a rock not to know that the Secure Jobs, Better Pay Bill passed this morning in Parliament.?Much of the focus has been on multi-employer bargaining, however the very real and immediate risk to Australian employers in the national Fair Work system will be the mismanagement of the new pay secrecy laws.

At present, employers can (and often, do) direct an employee not to reveal their pay to others.?This is usually contained in a clause of an employment contract.?Many would say that these clauses work against women more so than men when it comes to equal remuneration.?Others would say these clauses are simply about privacy and confidentiality.?

Either way, it is all about to change.

Compared to the complexity of multi-employer bargaining, the change is, at face value, simple.?The impact of this new change will not be simple; it will be very easy for the unthinking or unprepared employer to breach these clauses and face grievances, disputes and claims as a result.

In short, the new pay secrecy provisions provide:

1.?????an employee may disclose, or not disclose, their remuneration and any terms and conditions necessary to determine remuneration;

2.?????an employee may ask any other employee or person about their remuneration and any terms or conditions of that person’s employment to determine remuneration;

3.?????clauses in employment contracts or workplace agreements which contain a pay secrecy clause will have no effect; and

4.?????an employer that enters into a contract with a pay secrecy clause will be liable to civil penalties.

Once the law comes into effect, you can imagine the questions around the coffee machine: “What are your hours of work… do you get paid more for your early starts… are you paid annual leave loading when you take leave or is it built into your wage… how much was your bonus last year?”.?

While the purpose of the new pay secrecy provisions is clearly focussed on people’s day to day wage or salary, the word “remuneration” is used, and is not defined.?We can only imagine that employees (and unions) will ask any questions they like as it relates to all forms of remuneration and payments, including discretionary bonuses and even payments made when staff leave.?It will be interesting to see where the line is drawn on what can be asked/disclosed, and just how broadly “remuneration” will be interpreted.?

Asking about, and disclosing, remuneration will constitute a workplace right and therefore be covered by the general protections (adverse action) provisions of the Fair Work Act. Therefore, if anyone is treated adversely in connection with a pay secrecy question, comment or disclosure, a general protections claim could well arise. ?

Our thoughts??Don’t wait and see how things “play out”.?Get across the new laws now and view them as an opportunity to update your own workplace documentation.?As a starting point, take advice and have your employment contracts and policies updated. ?Diligent employers will also support their managers and HR and see to it that they receive the proper education and training in the new laws and how to practically roll out the changes required.

If you need advice, contact Joshua Richards or Carla Vinciullo on (08) 6109 6644.

Note: The above article is written for general information purposes and is not intended to constitute legal advice, nor should it be relied upon as such.