Fair Work Amendment (Gender Pay Gap) Bill 2015

Wednesday 23 September 2015 @ 11.40 a.m. | Industrial Law

The Fair Work Amendment (Gender Pay Gap) Bill 2015 was introduced into the Federal Senate on Thursday the 17 September 2015. The Bill sets out to remove any legal prohibitions on workers discussing their own pay and thereby attempt to reduce the gender pay gap. It appears that many employment contracts, especially in the private sector, include a ‘gag’ clause’ which acts to prevent employees from discussing their salaries with one another with disciplinary procedures prescribed in the event of a breach.

Background

Earlier in the year, the Australian Council of Trade Unions published a condemning report highlighting latest figures from the Australian Bureau of Statistics that showed the pay gap in Australia has blown out to 18.8 per cent.  “The blow out in average weekly earnings for full time workers means Australian men now earn $298.10 more than Australian women each week” the article reported.

The Bill

The current bill represents the first step towards greater gender pay equality. The explanatory memorandum to the bill explains that pay secrecy can help hide discrimination, unconscious bias and bad decision making, such as where two people are paid differently for doing the same job. The bill will provide for better pay transparency in an effort to encourage discussion regarding pay amongst colleagues without fear of retaliation from upper management.

The bill will amend the current Fair Work Act 2009 (Cth) to provide that any term of a modern award, enterprise agreement, or contract of employment has no effect to the extent that it prohibits an employee from disclosing the amount of an employee’s earnings or to the extent that it allows an employer to take disciplinary action against an employee for such discussions. The bill will not have the positive effect of forcing pay disclosure or discussion, but it would prohibit employers of exerting pressure on their employees to remain silent.

Queensland Senator Larissa Waters commented in her second reading speech that:

“Women will sometimes only discover that they are being paid less than their male colleagues after talking to a co-worker…When pay is set in secret by individual negotiation, women are at a disadvantage. While there is no evidence to suggest that women's abilities to negotiate are any different from men's, research shows women's negotiations are often less successful. Research suggests that women are less likely to ask for a raise or negotiate aggressively, and are more likely to be judged unfairly by managers.”

Senator Waters added that this would not entirely fix the gender pay gap as there a variety of other factors that current affect the pay gap such as women and men working in different industries, a lack of women in senior roles and differences in education and experience. She affirms that this is nevertheless a positive first step to addressing the issue. 

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