Freedom to discuss remuneration
A private Member’s Bill aimed at protecting employees that discuss or disclose their own remuneration has been drawn from the Parliamentary ballot in late March 2024.
If enacted, the Employment Relations (Employee Remuneration Disclosure) Amendment Bill (“Bill”) would enable employees to take action against their employers for taking (or threatening to take) any adverse action against them for:
- discussing their remuneration with other employee(s) in the workplace;
- disclosing their remuneration to any other person; or
- inquiring about the remuneration of another employee employed in the workplace.
The Bill achieves this by amending the Employment Relations Act 2000 to specify these actions as a basis for pursuing a personal grievance.
Commentary
Some employers consider their employees’ remuneration to be commercially sensitive information and that this falls within their employees’ general confidentiality obligation. For most employees, we consider that it would be difficult for an employer to argue that their rate of pay should be treated as commercially sensitive information.
To address this, some employers include express provisions in their employment agreements or company policies that prohibit their employees from discussing or disclosing their own remuneration with other people (including other employees). Practically speaking, it would be rare for employers to discover a breach by their employees, and in many cases, employees simply refer to a range or an estimate instead of disclosing their actual remuneration.
That said, if an employee is found to be in breach of their agreement, an employer may seek to address this by conducting a disciplinary process. However, it is questionable whether (and how far) an employer could justify taking serious disciplinary actions against an employee in the event of a personal grievance, given that the onus will be on the employer to justify its actions as one that a fair and reasonable employer could take.
In our view, provisions that prohibit employees from discussing or disclosing their own remuneration are there to deter or discourage employees from sharing information on their own remuneration with other employees. Some employers will include such provisions, as they prefer to keep remuneration matters secret and deter employees from comparing their terms and conditions with other employees – even if the employer does not intend to take formal actions in the event of a known breach.
The effect of such practices contributes to a culture of pay secrecy, which detracts from a competitive labour market in which both employers and employees can make informed choices in their own interests. In our view, it makes sense to ensure that workers can discuss their own pay with other workers without detrimental consequences, and this is a part of our fundamental right to freedom of expression, which include the right to seek and impart information. In addition, protecting employees’ rights to discuss and disclose their own rate of pay, in most cases, would not impose any major compliance costs on employers.
The Bill has been drawn and it is currently at the first reading stage in Parliament. In our view, there are some drafting issues with the Bill and these can be addressed at the Select Committee stage. However, in the current environment there is no guarantee that there is sufficient support for the Bill or that consensus can be reached.
