Your pay is no longer a secret

Employees will now be able to ascertain if their pay is fair and reasonable compared to their colleagues.

Employees will now be able to ascertain if their pay is fair and reasonable compared to their colleagues.

There is a reason the gender pay gap is so big in Australia - it holds many secrets. 

That is according to the government which has now made it unlawful to include secrecy clauses in employment contracts. In the latest amendments to the Fair Work Act  - the Secure Jobs, Better Pay Bill 2022 - is a section regarding the ways to tackle inequality in the workplace.  

One of those includes “pay secrecy” and the banning of such clauses which have now come into effect.  

As reported by The Australian this week, the gender pay gap stopped closing this year, with women earning $26,596 less than men on average, fresh research from the Workplace Gender Equality Agency shows.

According to federal employment and workplace relations minister Tony Burke, pay secrecy clauses have long been used to  “conceal gender pay discrepancies".

“Banning them will improve transparency and reduce the risk of gender pay discrimination by allowing women to compare their pay with that of their co-workers. Differences can be discussed with their manager without fear of punishment.” This ban on secrets, Burke continued as the legislation passed, is “primarily aimed at reducing gender-based pay differences.” 

Employment law expert and Pragma Lawyers director Elizabeth McLean told The Oz the tweaks the government have made, which became law from December 7, is to empower employees to bargain for higher pay through knowledge of what employees within the same enterprise or industry are being paid.

"The government’s intention is that this knowledge will help employees understand what others who perform similar jobs are being paid to ascertain if their pay is comparably fair and reasonable.  It is hoped that these changes will help to reduce the gender pay gap," McLean said.

You actually weren’t allowed to discuss your pay before

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. They are, well, were, particularly common in industries that offer incentives and bonuses. 

Before the changes, Australian employers could legally include pay secrecy clauses in employment contracts.  

Employees who blabbed and breached that clause could have been fired or copped a warning for breach of contract.  

What’s changed? 

The government removed secrecy bans in a bid to give employees more transparency and information about their workplaces - whether they are joining a new business or starting a new job.  

This new provision will allow workers to ask one another about, and to disclose, their remuneration and relevant conditions, like over time, work load in real terms not just in general “you will be required to work 38.5 hours a week” phrases.  

Employees can then use this info to assess whether their remuneration is fair and comparable to that of other employees in the same workplace or industry.  

The government, gender equality advocates and the unions have agreed this will allow employees greater bargaining power, reduce actual or perceived inequality, and increase transparency around gender pay discrepancies.

Can I know my boss’ pay?

"You can ask, but he or she may not tell you and isn’t obliged to," McLean said. 

"Employees cannot be penalised for refusing to reveal their pay details. In respect to the boss, they may be unlikely to tell you and may have genuine reasons not to. For example, their pay may be fully or partially determined by the company’s profits – which is something they are not obliged to reveal to their colleagues."

Will this mean my pay will be public?

No, according to McLean.

"Unless your rate of pay is contained in an enterprise agreement, which is an instrument which can be downloaded from the Fair Work Commission. These instruments include rates of pay for certain positions within an enterprise. They do not contain people’s names, only the classifications and respective pay rate.  These instruments have always been publicly available."

"There is no ability for an employee to obtain the pay information of another employee unless that employee shares this information with them.  The salaries of certain government and statutory positions may be publicly available – but this has always been the case," she said.

Are any contracts exempt?

Pretty much everyone is covered by these new rules. The vast majority of Australian employers and employees in the private sector are covered by the new laws. 

McLean clarified: "If you are employed by a state system employer in Western Australia -  for example a partnership, sole trader, unincorporated partnership, unincorporated trust or unincorporated association or not-for-profit which is not trading or financial, the laws won’t apply to you. If you are employed by some government employers these changes will not apply to you.

"Remember these laws apply to employees. They will not apply to company directors who are not employed, or to independent contractors."