Testing the new ‘pay secrecy’ provisions

A matter before the Federal Circuit Court is set to test the provisions that prohibit pay secrecy.

The applicant in the case was employed as a casual sales assistant in a Melbourne bookshop. The applicant has claimed her former employer stopped giving her shifts and dismissed her from her employment, having ‘lost its trust and confidence in her’, after she had disclosed to her fellow workers her pay adjustment and backpay.

The applicant filed a general protections claim against her former employer following the termination of her employment, alleging that a breach of the new prohibiting pay secrecy provisions in the Fair Work Act 2009 (Cth) (FW Act).

Whilst there is no reported outcome as yet, our Alert is intended to reinforce the importance of compliance and caution, where pay increases at this time of year are often awarded.

The matter is currently programmed for mediation and if not resolved a further Alert will follow its progress.

Prohibiting pay secrecy laws – the recap

As per our previous legal alerts on 29 November 2022 and 26 May 2023, the laws with respect to prohibiting pay secrecy are now in place.

An employee may disclose, or not disclose, any of the following information to any other person:

1. the employee’s remuneration;
2. any terms and conditions of the employee’s employment that are reasonably necessary to determine remuneration outcomes.

An employee may ask any other employee (whether employed by the same employer or a different employer) about any of the following information:

1. the employee’s remuneration;
2. any terms and conditions of the other employee’s employment that are reasonably necessary to determine remuneration outcomes.

Civil penalties may be awarded against employers who contravene the prohibiting pay secrecy provisions if:

1. the employer enters into a contract of employment or other written agreement with an employee; and
2. the contract or agreement includes a term that is inconsistent with employee rights relating to pay secrecy.

Employers should prioritise the review of their employment of contract templates, policies, and other workplace instruments to eliminate pay secrecy provisions, and train and instruct payroll and Human Resources teams to ensure that in practice, compliance occurs.