As many of you will likely remember, workplace issues and policy was a key election topic of 2022. One of the key pieces of legislation from the new Albanese Labor Government was the Secure Jobs, Better Pay Act 2022 (Cth).
This piece of legislation was significant for a number of reasons but one the reforms included a new provision added to the Fair Work Act 2009 (Cth) that prohibited employers from preventing their employees from discussing their remuneration. This came into affect on 7 December 2022.
As a result, most employees now have a right to:
- Ask other employees about any aspect of their remuneration such as their wage rate or annual salary.
- Ask other employees about working hours, penalty rates, commissions and bonuses.
- Choose what information (if any) about their remuneration they want to disclose or discuss with others, including those external to the workplace.
- Despite this, employers are NOT required to disclose any information about the remuneration of their employees.
This is a key departure from how business has been done in the past and the government has been very clear that their intention is to increase transparency around remuneration and in doing so, decease any gaps in remuneration caused by gender or other forms of discrimination.
The next question you are likely going to ask is when this all comes into effect, so we have provided a list below which should help clarify things for you below:
- Contracts that existed prior to 7 December 2022, pay secrecy clauses are still in force unless the contract is varied for any reason, at which point the pay secrecy clause will no longer have any effect and will be removed.
- New contracts entered into after 7 December 2022 are not permitted to have pay secrecy clauses and if they do, they will not be enforceable. Any contracts with pay secrecy clauses after 7 June 2023 will expose employers to significant penalties.
- For all enterprise agreements or awards, all pay secrecy clauses become automatically unenforceable as of 7 December 2022 regardless of when it was created.
- This prohibition on pay secrecy clauses does not apply to Deeds of Settlement or Release.
Employers still have the right to choose whether to advertise the level of pay but if they do, the rate offered must be at least the minimum allowed under the relevant agreement or award. If an agreement or award states a minimum rate of pay is available, the relevant job ad must notify potential applicants of this.
In essence, employers should not include pay secrecy clauses in new or amended contracts of employment. Employers should also ensure that if any advertised job vacancies include a remuneration figure that amount should be no less than the minimum rate allowed under the applicable industrial instrument for that position.
While these changes may seem scary or stressful, they do not have to be. Performance Advantage is here to provide you with all the advice and assistance you need to manage these changes and remain compliant.
We will also have template policies and clauses on our website for you to purchase, so don’t forget to check that out by clicking the below button below and clicking on ‘shop’ at the top of the screen when you get to our website.
If you would like to discuss any aspect of this article or the new changes to pay secrecy clauses, you can email us at suzanne@performanceadvantage.com.au or call us on 0408897079.
Suzanne Diprose, Director
Suzanne@performanceadvantage.com.au
0408 897 079