There have been a number of recent changes to the Fair Work Act 2009 (Cth) (the Act) which occurred during late 2022 and will gradually come into effect throughout 2023. One of the primary amendments to the Act which occurred as of 7 December 2022 relates to the prohibition on pay secrecy clauses in employment contracts.
What has changed?
As and from 7 December 2022, pay secrecy clauses in employment contracts that are entered into from this date are prohibited at law/null and void. Put simply, this means that any employees who enter into an employment contract with an employer from 7 December 2022 onwards can now disclose their pay to fellow employees, ask other employees about their levels of pay, and discuss any other relevant terms and conditions that relate to an employees employment at their workplace.
Employers Considerations
From an employer’s perspective there are several considerations to be conscious of to ensure that your business is complying with the legislative amendments under the Act. Any employment contracts entered into before 7 December 2022 with pay secrecy clauses are still operative which means that all employees who are bound by an employment contract before this date cannot discuss their rates of pay with fellow employees, along with other privacy and confidentiality obligations. However, once an employment contract is amended due to an increase in salary, change of role etc. the pay secrecy clauses must be removed from the contract. Additionally, any Industrial Instrument/Award that applies to employment contracts which expressly contains pay secrecy clauses is null and void from 7 December 2022, irrespective of whether this was established before or after this date.
Our recommendations for employers are as follows:
1. Review all employment contracts and remove any references to pay secrecy clauses going forward;
2. Review employment contracts prior to 7 December 2022 and consider whether any amendments are required generally; and
3. Amend applicable workplace policies/procedures to ensure that there are no restrictions in employees discussing rates of pay in the workplace as and from 7 December 2022.
The team at Baker Love Lawyers are well placed to assist you with any employment queries and questions that you may have, particularly as the suite of legislative amendments come into effect across the next twelve (12) months. If you, your business or anyone that you may know requires assistance to ensure that their employment contracts, policies and procedures are in accordance with the Act, please contact Baker Love Lawyers on (02) 4944 3322.
