Key Points
- The federal government plans to introduce industrial relations reforms to parliament next week
- The government is proposing a ban on clauses in employment contracts that prevent workers from discussing their pay
Workers might soon be able to discuss their pay without fear of retribution under new proposed laws the federal government hopes will help close the gender pay gap.
The proposed ban on pay secrecy clauses forms part of the first tranche of the Albanese government's industrial relations reforms that will be introduced to parliament next week.
Employment Minister Tony Burke said these clauses are often used to conceal gender pay discrepancies.
The clauses, written into employment contracts, prohibit employees from discussing their salaries with others.
Not every employer subjects their employees to pay secrecy clauses, but they can create a culture of "mistrust and suspicion" and conceal gender pay discrepancy, according to Fiona Macdonald, a policy director at the Australia Institute's Centre for Future Work.
Ms Macdonald said a ban on pay secrecy clauses would not see the end of the gender pay gap, but it would be an important move in the battle to do so.
"When you've got an economy like ours where women in every single age group earn less than men, that absence of transparency...can be a real barrier (to closing the gender pay gap)," Ms Macdonald said.
In Australia, the gender pay gap is higher in the private sector than it is in the public sector. released in August, say it is 17 per cent and 12.2 per cent respectively.
Ms Macdonald believes this is in part because public sector employees work to "transparent classifications", which help create a "more generalised culture of discussion about pay and work value."
She said the government's bill should contain elements that promote the establishment of classifications in the private sector in order for it to be more effective in reducing gender pay disparity.
It should also force employers to include pay scales on job advertisements, cover an employee's entire remuneration package, including bonuses, and allow them to speak freely about their wages and conditions with colleagues and those outside the business.
Australian Council of Trade Unions president Michelle O'Neil said pay secrecy clauses "allow employers to hide discrimination" that stifle efforts to uncover the extent of the gender pay gap.
"Changes to make gender equity an object of our workplace laws, fixing pay equity provisions and banning pay secrecy are a significant step forward for millions of working women," Ms O'Neil said.
What other reforms is the Albanese government proposing?
The bill would also make it easier for the industrial umpire to order wage increases for workers so that men and women get the same pay for equivalent work.
Two new panels inside the Fair Work Commission (FWC) — one on pay equity, and one on the care and community sector — would be created under the legislation, which would also put in place a statutory "equal remuneration principle" that will make it easier for the FWC to order pay increases for low-paid, female-dominated industries.
"Putting an equal remuneration objective in the Fair Work Act means that it is one of the key starting points for any Commission decision," Ms Macdonald said.
"And having a pay equity panel is important because... (it) actually takes a concerted effort to consider how that might affect men and women differently."
Queensland has a similar principle that's designed to ensure gender-based assumptions are not used to assess work value.
"A key objective of this bill will be to help close the gender pay gap," federal Employment Minister Tony Burke said.
"Women should not be paid less than men – it's that simple."
Employment Minister Tony Burke said secrecy clauses are often used to conceal gender pay discrepancies. Source: AAP / Lukas Coch
Unions say the reforms would allow employers from different businesses to pool resources to advocate for pay increases, but some business groups warn it could lead to a spike in industrial action and subsequently drag on productivity.
Liberal Senator Simon Birmingham told the ABC he was concerned about the impact the proposed changes might have on small businesses, particularly in relation to collective bargaining.
"We'll be looking to test with the business community whether they've actually achieved consensus or whether this is … just providing what the union movement wanted without consideration of the needs of small businesses and how they could be impacted by some of these reforms."
Australian Industry Group chief executive Innes Willox criticised the government's consultation process on the changes and said he was "enormously surprised" they'd gone through cabinet.
"There has never been any discussion around what exactly is being proposed because employers haven't been told what's being proposed," he told the ABC.
Mr Willox said there was "deep frustration" among employers and employers groups, who were "a bit in the dark" over the government's proposals.
Mr Burke said further measures in the Secure jobs, Better Pay Bill would be announced before it is introduced to parliament.
A Senate committee on work and care also released its interim report on Tuesday, which included eight "urgent" recommendations for improving the balance between these two responsibilities.
It recommended the Department of Employment and Workplace Relations investigate law reforms to support flexible working arrangements and protect workers switching off from their jobs outside of contracted hours.
With additional reporting by AAP.
