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Hiring law, a guide by Dotto

Guide 3 of 5 · Fair Work Act 2009, ss 333B to 333D

Pay secrecy: what an employment contract may no longer say about pay

Under the Fair Work Act, an employee “may disclose, or not disclose” their own remuneration and the terms needed to work it out, and may ask other employees about theirs (s 333B); a contract or fair work instrument term inconsistent with that has no effect (s 333C), and an employer contravenes s 333D by entering into a contract or written agreement that includes one. The rules commenced on 7 December 2022 and reach older contracts only in the ways the transitional rules set out below.

Dotto does not recruit staff, run training or give migration advice: it is not a registered training organisation or a migration agent, and this guide is not legal or migration advice. General information only. The official place to check is the Fair Work Ombudsman.

  1. Licence
  2. Illegal work
  3. Sponsorship
  4. Pay secrecy
  5. Privacy
  6. Disability

The two rights, in the Act’s words

“(1) An employee may disclose, or not disclose, any of the following information to any other person:

(a) the employee’s remuneration;

(b) any terms and conditions of the employee’s employment that are reasonably necessary to determine remuneration outcomes.”

Fair Work Act 2009, s 333B(1)

Subsection (2) gives the matching right to ask: an employee may ask any other employee “(whether employed by the same employer or a different employer)” about that employee’s remuneration and the terms reasonably necessary to determine it. The Act’s example of such a term is “the number of hours that the employee works”.

Each right “is a workplace right within the meaning of Part 3-1”, and a person is not prevented from using it because they, or someone else, is no longer an employee of an employer (s 333B(3)). The Act’s first note says the general protections in Part 3-1 “also prohibit the taking of adverse action by an employer against an employee because of a workplace right”. Its second note points to s 341(3) “for the extension of workplace rights to prospective employees”, the people a hiring process deals with.

The right runs both ways. The words are “may disclose, or not disclose”, so the section protects an employee who keeps their pay private as much as one who shares it.

A secrecy term, and the employer that writes it in

Section 333C: “A term of a fair work instrument or a contract of employment has no effect to the extent that the term would be inconsistent with subsection 333B(1) or (2)”.

Section 333D goes further and makes including such a term a contravention. “An employer contravenes this section if: (a) the employer enters into a contract of employment or other written agreement with an employee; and (b) the contract or agreement includes a term that is inconsistent with subsection 333B(1) or (2)”. The section is written about the employer that enters into the contract or agreement.

Section 333D is a civil remedy provision; ss 333B and 333C are not. Under item 10B of the table in s 539(2), an order may be sought by a prospective employee, an employee, an employee organisation or an inspector, in a court the item lists: “(a) the Federal Court; (b) the Federal Circuit and Family Court of Australia (Division 2); (c) an eligible State or Territory court”. The maximum penalty is 600 penalty units for a serious contravention, and 60 penalty units otherwise. The Act gives “penalty unit” the meaning in s 4AA of the Crimes Act 1914 (s 12); Home Affairs puts the Commonwealth penalty unit at A$364 from 1 July 2026, so the individual figures are $218,400 and $21,840. A note to s 539 says the penalties in that column “are adjusted for bodies corporate” and for contraventions associated with underpayment amounts (see s 546). For a body corporate, s 546(2)(b) caps the penalty at 5 times the units: 3,000 penalty units for a serious contravention and 300 otherwise, which is $1,092,000 and $109,200 at $364 a unit from 1 July 2026.

Which contracts the rules reach

The rules were inserted by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, in Part 7 of its Schedule 1. When they apply to a contract depends on when it was made, set by item 59 of Part 13 of Schedule 1 to the Fair Work Act, the transitional Part the amending Act inserts, which uses “commencement” to mean the commencement of that Part.

  1. 6 December 2022The amending Act receives the Royal Assent.
  2. 7 December 2022Part 7 of Schedule 1 (the pay secrecy rules) and Division 1 of Part 26 of Schedule 1, which inserts the transitional rules into the Fair Work Act as Part 13 of its Schedule 1, both commence.
  3. Contracts made on or after 7 December 2022Sections 333B and 333C apply.
  4. Contracts made before 7 December 2022 with no inconsistent termSections 333B and 333C apply.
  5. Contracts made before 7 December 2022 with an inconsistent termSections 333B and 333C apply only from the time the contract is varied after commencement.
  6. Fair work instrumentsSection 333C applies to an instrument made before, on or after commencement.
  7. Section 333DApplies “after the 6-month period beginning on commencement in relation to a contract of employment entered into on or after commencement”.

So a secrecy clause in a contract signed before 7 December 2022 and never varied since is outside ss 333B and 333C, and s 333D does not reach a contract made before that date at all. A line saying secrecy clauses are illegal in every contract would claim more than the transitional rules allow.

Reading a contract against s 333B

The test in ss 333C and 333D is inconsistency with s 333B(1) or (2), so the questions come from those subsections. Does a term stop the employee from disclosing their own remuneration, or the terms reasonably necessary to work it out, to any other person? Does it stop them from asking another employee, at the same employer or a different one, about theirs? A term that does either has no effect to that extent under s 333C, within the transitional rules above, and s 333D applies “after the 6-month period beginning on commencement in relation to a contract of employment entered into on or after commencement”, commencement being 7 December 2022.

The amending Act’s outline of the new Division puts it briefly: the Division is about disclosing remuneration and matters relevant to it, and terms of contracts and other instruments that “purport to prohibit such disclosures are prohibited”.