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Australia introduces new laws to combat pay secrecy and promote wage equality

March | Employee Management | Article

Pay Secrecy

Effective 7 December 2022, legislation changes have resulted in significant changes to the issue of pay secrecy and how it is managed within employment contracts and in the workplace. Those changes will grant all employees, including future employees, the right to choose whether or not they share information about their pay and employment terms and conditions with others. In addition, employees have the right to ask fellow employees about the same without fear of any adverse action from their employers.

Employees cannot be forced to divulge this information to another employee, and any disclosure, in this case, would be voluntary, and employers can not sanction it.

As a result of these changes, pay secrecy terms in employment contracts, awards or agreements that are inconsistent with the new legislation will be banned. It is important to note though that the start dates for bans differ depending on the situation:

 For new contracts and arrangements

Under any new employment contract, entered into on or after 7 December 2022, pay secrecy terms will have no effect or enforceability. From 7 June 2023 they will need to be removed from all employment contracts or agreements and any employer who enters into a contract or agreement containing pay secrecy terms could face penalties.

For existing employment contracts

The pay secrecy terms in contracts entered into before 7 December 2022 will remain in effect until such time as those contracts are varied. Once a variation occurs, all pay secrecy terms will be void and have no effect or enforceability.

For new or existing fair work instruments

As legal workplace documents, fair work instruments such as awards or enterprise agreements are separate from employment contracts or workplace policies. Pay secrecy provisions in fair work instruments have no effect and cannot be enforced after 7 December 2022. This applies regardless of whether the instrument was drafted before, after, or on this date.

If you have any questions about any of these changes or would like to speak to our HR Team to discuss what your business needs, to action, regarding these changes, please contact us on (08) 9383 3293 or send us an email at [email protected]

If you are an employer and have any questions about these changes or need pragmatic expert advice, contact our local team of Human Resources and Industrial Relations experts at WCA Solutions on (08) 9383 3293.

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