At MDC Legal we are proud, as a firm with a strong majority of female employees, to celebrate International Women’s Day!
Today is not only a day to celebrate progress towards gender equality but also an opportunity to bring awareness to areas for improvement.
Australia’s Gender Pay Gap
Australia’s Workplace Gender Equality Agency has identified in their December 2022 publication ‘Australia’s Gender Equality Scorecard that in Australia’ that, on average, for every dollar a man earns, a woman earns 87 cents.
Although there is still a way to go, there is an overall positive drive to achieve gender equality, including, most recently, with the new legislative amendments to the Fair Work Act 2009 (Cth) (FW Act) – in particular, the amendments around transparency regarding pay information.
Restricting Pay Secrecy
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (the Secure Jobs Better Pay Act) amends the FW Act so that pay secrecy clauses in employment contracts will have no effect after 7 December 2022: s 333C FW Act.
This change was enacted to promote the rights of women not to be discriminated against based on gender by assisting them to confirm they are not being paid less than male colleague for doing the same job. It is consistent with the theme of the Secure Jobs and Better Pay Act to address gender inequality.
What are the changes?
Broadly, employees now have a new workplace right to share or not share information about their pay and other employment terms and conditions that would be needed to work out their pay, such as their hours of work.
Employment contracts can now no longer prevent employees from asking other employees, with the same or different employer, about their pay, and employment terms and conditions that would be needed to work out their pay, such as their hours of work.
However, if an employee is asked and prefers not to disclose that information, then they have the right to keep that information private.
What happens to pay secrecy clauses in employment contracts?
Pay secrecy clauses in employment contracts inconsistent with these changes will have no effect after 7 December 2022.
Section 333D of the FW Act now makes it a contravention after 7 December 2022 for employers to enter into a contract with an employee, which includes a term inconsistent with the employee’s rights relating to pay secrecy.
However, there is a 6-month grace period for employers, ending 7 June 2023, before employers can be held liable if a contract contains pay secrecy provisions, which can carry penalties of up to $66,000 per contravention.