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Pay secrecy

person with hand over mouth

The challenge

New employment contract with pay secrecy terms

Practice A wants to hire Jenny as a medical receptionist.

On 1 January 2023, Practice A gives Jenny an employment contract to sign that includes a clause saying she isn’t allowed to discuss her pay with anyone.  

After Jenny starts her employment, a manager overhears Jenny telling a colleague her hourly rate of pay. Because Jenny’s contract was entered into after 7 December 2023:  

  • The clause in her employment contract saying she isn’t allowed to discuss her pay with anyone has no effect; and
  • She has a workplace right to talk about her pay with anyone if she wants to.

Practice A realises that Jenny’s employment contract contains a pay secrecy provision when it shouldn’t and sends Jenny a letter confirming that the clause saying she isn’t allowed to discuss her pay does not apply.

Important: From 7 June 2023, including a pay secrecy provision in an employment contract is a civil remedy provision meaning that an employer, and relevant individuals involved in the contravention, can be exposed to penalties for breach under the Fair Work Act 2009 (Cth).

How Avant Law can assist

Our lawyers can help Practice A to rectify its mistake, including by preparing a letter to Jenny confirming that the pay secrecy provisions of her contract do not have effect.

We can also review Practice A’s employment contracts to ensure that they are compliant with the new pay secrecy provisions and Practice A’s other obligations under workplace law.

The challenge

Existing employment contract with pay secrecy terms

Jordan entered into an employment contract with Practice B in November 2021.

Jordan’s contract of employment has a pay secrecy term that prevents him from discussing his pay with other employees.  

Jordan pay secrecy term is still in effect because he agreed to it before 7 December 2022. Any pay secrecy terms agreed to before
7 December 2022 continue to operate until the contract is varied.

On 1 July 2023, Jordan receives a pay rise and Practice B sends Jordan a letter confirming his pay rise.  

Jordan’s contract has been varied by the pay rise and from 1 July 2023:  

  • The clause in his employment contract that prevents him from discussing his pay has no effect; and
  • Jordan has a workplace right disclose his pay to others.

How Avant Law can assist

Our lawyers can provide Practice B with a letter of variation to send to Jordan that confirms his pay increase and amends his contract of employment to ensure compliance with the new pay secrecy provisions.

We can also review Practice B’s employment contracts to ensure that they are compliant with the new pay secrecy provisions and Practice B’s other obligations under workplace law.

We can help you

If you have any questions, or would like more information about how we can assist you or your practice, please call 1800 867 113, or to organise a confidential discussion at a time that suits you, please click here 

Disclaimers

The information in this article does not constitute legal advice or other professional advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of this content. It should not be used as a substitute for legal advice. The information contained in this case study is fictional and only intended to outline some of the services that Avant Law offers. 

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