The explanatory memorandum for the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 provides the following overview:
Clause 333C— Pay secrecy terms to have no effect
418. New clause 333C would provide that terms of a contract of employment or a fair work instrument that are inconsistent with subclause 333B(1) or (2) would have no effect.
419. This clause would prevent employers from enforcing pay secrecy clauses in employment contracts and fair work instruments. This clause would work alongside existing sections of the FW Act which provide certain terms of awards and agreements have no effect, including section 137 (for modern awards), paragraph 253(1)(b) (for enterprise agreements) and section 356 (workplace instruments, agreements, or arrangements (whether written or unwritten)).
Clause 333D—Prohibition on pay secrecy terms
420. In addition to new clause 333C, new clause 333D would prohibit employers from including pay secrecy clauses in new employment contracts and other written agreements where the contract or agreement includes a term that is inconsistent with the workplace rights raised by new subclauses 333B(1) or (2).
421. Many Australian workplaces have voluntarily moved to removing pay secrecy clauses from their employment contracts. New clauses 333C and 333D would ensure that all new employment contracts and written agreements do not contain pay secrecy terms.
There are a few points to make, so we have pinpointed the below for ease of reading –
- There is no need for the business to vary/amend existing contracts that include the sentence around pay confidentiality. This is because from the introduction of the new amendments, pay secrecy terms will simply no longer have any effect – meaning you are unable to discipline any employee for non-adherence.
- The memorandum expressly calls out that the term is prohibited in new employment contracts.
- For new contracts, we recommend removing any sentence that may restrict or disclose their remuneration to others, and replacing with ‘You have a right to disclose, or not disclose, details of your remuneration and relevant conditions to others.’
If you have any questions regarding these changes, or if you are unsure of what to do, we encourage clients to call ER Strategies on 1300 55 66 37.
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