The Fair Work Commission issued a ruling addressing how new enterprise agreements will be affected by pay secrecy provisions. This ruling demonstrates the wider practical reach of the new provisions beyond employment contracts. This blog covers the new provisions, the Commission’s decision as well as the implications for employers.
What are the new pay secrecy amendments?
As of 7 December 2022, the Fair Work Act underwent significant changes with the Secure Jobs, Better Pay amendments.
Under the new provisions, employees now have workplace rights to:
- disclose details about their remuneration, and the terms and conditions of their employment that are reasonably necessary to determine remuneration outcomes (such as hours of work); and
- ask any other employee about the other employee’s remuneration, and any terms and conditions of the other employee’s employment that are reasonably necessary to determine remuneration outcomes.
These rights apply to national system employees, except those already under pay secrecy terms in their contracts before the specified date, and without subsequent modifications.
Any pay secrecy terms in employment contracts or fair work instruments (e.g., awards, agreements, determinations, and Fair Work Commission orders) that conflict with these new rights will hold no legal effect from 7th December 2022.
What was the Fair Work Commission’s ruling about?
Equans Electrical and Communications Pty Ltd applied for approval of an enterprise agreement with a client list used to determine varying overtime pay rates for employees. Equans requested to redact the list, citing commercial sensitivity and a desire not to disclose client names publicly. However, Deputy President Dobson ruled against the confidentiality order, stating that Equans could have expressed the condition differently if the names were truly sensitive. Additionally, withholding the information would breach workplace rights granted in the Fair Work Act, making it essential for employees and third parties to access full employment terms and conditions.
Despite the request being denied, the enterprise agreement was ultimately approved without the confidentiality order.
What should you be aware of as an employer?
Employers should be cautious when drafting employment terms and conditions to avoid including commercially sensitive information like client lists. While pay secrecy provisions still apply, excluding such details can prevent other sensitive information from being disclosed by employees.
The ruling highlights that pay secrecy rules extend beyond employment contracts, covering other written agreements with employees. Importantly, any pay secrecy terms made after 7 December 2022 hold no effect on employment contracts and fair work instruments such as modern awards, enterprise agreements, workplace determination, and Fair Work Commission orders. A crucial reminder for employers to navigate these provisions diligently.
What happens if I contravene these new laws?
As of 7 June 2023, employers face penalties if they include pay secrecy terms in contracts or other written agreements with employees.
Companies could be fined up to $93,900, while individuals may face fines of up to $18,780. In cases of serious contraventions, companies could be liable for fines up to $939,000 and individuals may face fines up to $187,800. These penalties aim to discourage the use of pay secrecy terms and promote transparency in employment agreements.
- From December 2022, employees were granted new workplace rights regarding pay secrecy.
- Employers must be cautious when drafting employment terms and avoid including commercially sensitive information.
- Contravening pay secrecy provisions can lead to extensive fines.
Gladwin Legal are experts in employment law and have extensive experience in advising businesses. If you require assistance in understanding your legal obligations please contact us at or 1300 033 934.