Is it time to change your policy? New WHS rules pin down pay secrecy terms and job ads

The ombudsman is reminding businesses and employees alike that secrecy clauses no longer have a place in the government’s efforts to improve the country’s industrial relations landscape.

Recently, HRD reported on the new rules that ramp up gender equality measures.

Julia Angrisano, also said organisations are on board, as the National Secretary of the Finance Sector Union of Australia encouraged that “greater transparency would only help to improve workplace culture.”

What are the changes?

Starting 7 December last year, the reforms prohibit secrecy about employees’ pay. The FWO has clarified that there are transitional arrangements in place that would apply.

However, when it comes to new workplace rights of existing and future employees, they are now empowered to do the following:

• share or not share information about their pay and their employment terms and conditions that would be needed to work out their pay, such as their hours of work
• ask other employees (with the same or a 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.

The FWO clarified that these new rights also mean that employees can’t be forced to give the above-stated information to another employee “if they don’t want to.”

Another crucial element is that employees can exercise these rights “even after they leave their employment.”

Who are the covered employees?

According to the FWO, these new rights apply after 7 December 2022:

• if an employee and employer enter into a new employment contract on or after 7 December 2022, or
• for existing employment contracts where the contract doesn’t include pay secrecy terms inconsistent with the new workplace rights.

Suppose an employee’s existing contract is inconsistent with the new workplace rights, and the contract is changed after 7 December 2022. In that case, the new workplace rights apply to the employee after the contract is changed, the FWO explained.

Employer’s adverse action

Employers can’t take adverse action against an existing or future employee either:

• because of these new workplace rights or
• to prevent an existing or future employee from exercising these rights.

The FWO reminded employers that it could take enforcement action, including starting court proceedings for alleged breaches of the adverse action provisions. Thus, employers could face penalties for any violation of this prohibition.

Pay secrecy terms in a contract

Changes on contract stipulations will start on 7 June 2023, as the FWO said that pay secrecy terms inconsistent with the above-stated workplace rights can’t be included on or after 7 December 2022.

The FWO warned that such prohibition applies to any fair work instrument, including an award or enterprise agreement, explaining “that term will have no effect and can’t be enforced.”

It clarified that the prohibition applies after 7 December 2022 for employment contracts in effect before 7 December 2022, if the contract:

• doesn’t include a pay secrecy term
• includes a pay secrecy term and the contract is changed after 7 December 2022. When this happens, the laws will apply after the contract is changed.

“For enterprise agreements, awards, or other fair work instruments … any pay secrecy terms have no effect and can’t be enforced after 7 December 2022. This applies regardless of whether the instrument was made before, on or after this date,” the FWO said.

Changes to job ads

Moreover, according to the FWO, effective on 7 January 2023, job advertisements can’t include pay rates that would breach the Fair Work Act, or a fair work instrument.

“This means that job ads can’t include pay rates or workplace conditions that undercut employees’ minimum entitlements,” the FWO said.

For businesses that are advertising pieceworker positions where the workers are also entitled to a periodic rate of pay (an hourly or weekly rate of pay), employers need to:

• specify the periodic pay rate that applies
• state in the ad that a periodic pay rate will apply.

The FWO clarified that these requirements apply from 7 January 2023, regardless of when the job ad was originally posted.

“This means that even if the ad was posted in 2022, the requirement applies to that ad from 7 January 2023,” the FWO said, warning that “employers [can] face fines for breaching these provisions unless they have a reasonable excuse for not complying.”