As an Employer can you legally prevent your Employees from discussing their salary?
In your company, it will be highly likely that your Employees have varying rates of pay. The discussion of pay amongst your team may well be an issue and one that you have decided to enforce a ‘ban’ in the workplace, in our article today we go over this subject, taking a look at: is pay confidential by law (UK), relevant case law, including comparators, can you prevent disclosures taking place, and what steps you should adopt in your company.
Is it illegal to prevent your Employees from discussing pay?
Yes, it is illegal to prevent your Employees from disclosing/discussing pay, by that we mean if they are disclosing a difference in pay, if they are trying to ascertain whether an equal pay issue between male and female Employees exists.
As well as preventing Employers from paying men and women different wages for the same work, the Equality Act 2010 covers what you as an Employer can and cannot do regarding your Employees disclosing/discussing pay.
Remember that an Employee does not necessarily have to work in the same role as a comparator to make an equal pay claim and may do so if the work is rated as equivalent or of equal value (March 2021) Brierley and others v ASDA Stores Ltd Therefore, we strongly advise that as an Employer you review your pay practices in these situations to ensure all are paid appropriately for the work they do.
The Equality Act 2010 prevents you from adding clauses into Contracts of Employment that prohibit disclosure/discussion of pay. This is found in The Equality Act 2010, Part 5 Chapter 3 Disclosure of Information, and states the following acts as protected:
- seeking a disclosure that would be a relevant pay disclosure
- making or seeking to make a relevant pay disclosure
- receiving information disclosed in a relevant pay disclosure
This protection, therefore, means that Employees have the legal right to disclose/discuss, and enforcement or disciplinary action could result in claims of victimisation if they can prove they were trying to identify an equal pay issue. It is also worth noting that Employees could use equal pay as the reason for the disclosure, even if this was never their intention.
As an Employer can I enforce a secrecy clause to prevent pay discussions?
As mentioned above and since the introduction of the Equality Act in 2010, Employees have the legal right to disclose/discuss pay, as an Employer you would have no legal standing to prevent your Employees from disclosing pay, that being said as an Employer you can suggest that discussions do not take place during ‘work hours’ and you can prevent them from doing so, we will take a look at some of the simple measures you can adopt in your workplace later.
Due to the protection that your Employees have if you did decide to add a secrecy clause the enforcement of this would be problematic and could lead to claims of victimisation in a tribunal.
As an Employer can I discipline an Employee for disclosing their pay details?
There could be some circumstances where a pay disclosure/discussion forms part of another offence, this may be where the Employee is disclosing/discussing their pay in an attempt to bully, this behaviour would be deemed inappropriate, as an Employer you could then investigate the matter and it may lead to a disciplinary and sanction being issued, it is essential to remember the sanction would be for that offence not on the grounds of the pay disclosure.
As mentioned previously your Employees have legal protection as set out in the Equality Act 2010 and to take disciplinary action against an Employee for disclosing/discussing pay could lead to a claim for victimisation.
As an Employer how should I manage pay discussions at work?
In a company that has a clear pay structure, that is open and honest this area should not be an issue, we understand that for many companies pay is still an issue and one that needs to be addressed, for Employers the thought that Employees are openly disclosing/discussing pay can be uncomfortable, there are many reasons for this, in many cases, it is a lack of structure.
There is no doubt that a lack of structure has the potential to cause a significant amount of unrest in the workplace and most certainly damage your internal culture, we note pay infrequencies daily, and it is clear that structure and a lack of understanding is prolific. Let’s now take a look at what you can do to make improvements as an Employer, you could do this by implementing a number of simple measures, the improvements would be dramatic.
As we have already mentioned and given the risk associated with pay secrecy clauses, we would always advise you to adopt a softer approach to discourage disclosures/discussions surrounding pay. You could do this by increasing transparency around your company’s pay practices, introducing pay that is non-discriminatory, and having a fair structure to work within, you could do this by:
- Advertising rates of pay at the recruitment stage
- Communicate with new starters during induction
- Communicate during probationary and any other review cycle/s
- Introduce transparent and fair pay practices
This may include:
- Introduction of new job descriptions (inclusive of pay details for each role)
- Introduction of pay banding (inclusive of pay details for each role)
- Creation of a succession plan (with a clear sightline of progression to the next steps)
- Conducting reviews (completing objectives and reviews)
By adopting these simple measures, you would increase transparency around your company’s pay practices, it would clearly identify that the pay is non-discriminatory, the introduction of a ‘pay banding’ system not only sets a framework and clear path it also provides Employees the sense of what pay comes with any particular job role, there is no doubt that by implementing transparency you would see a reduction, and perhaps eliminate pay discussions, you would also dispel unequal pay practices.
By doing all of this, we know pay is an age-old subject, and ultimately it will always be discussed and a sensitive area, there may be times where Employees feel they need to raise concerns, as an Employer you should encourage a 2-way discussion in confidence, we would always suggest HR take the lead and that any outcome is confirmed in writing.
How can we help?
We are experts dealing with your HR and Employment Law matters, we can assist you with any type of HR matter, or should you need our support with EVP, or a salary review, you can contact one of our team today and we can assist you; contact us on: 0333 0069489 or email us on: [email protected]
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