Committee rejects push for pay transparency

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Committee rejects push for pay transparency

A ‘pay-transparency’ bill that aims to reduce the gender pay gap should not be enacted into law, a government-dominated Senate committee has recommended.

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A ‘pay-transparency’ bill that would enable employees to reveal how much they are paid should not be enacted into law, a government-dominated Senate committee has recommended.

However, the committee recommended that government, employer and industry stakeholders, and employee advocates, should collaborate to promote and implement best-practice strategies to tackle the gender pay gap.

The Fair Work Amendment (Gender Pay Gap) Bill 2015 would, if enacted, remove restrictions preventing employees from discussing their pay or earnings with colleagues. It would also prohibit employers from taking adverse action against employees for disclosing this information.

According to Professor Michelle Brown and Ms Leanne Griffin, academics at the University of Melbourne, 50-90% of organisations discourage employees from sharing remuneration information. 

Mind the gap


The Gender Pay Gap bill was introduced into Parliament by Queensland Greens Senator Larissa Waters, whose portfolio of responsibilities includes the portfolio for women. 

Senator Waters is concerned about a persistent pay gap between men and women. She sought to reduce that gap by removing employer-imposed prohibitions on workers discussing their pay. If enacted, any term in any modern award, enterprise agreement or contract of employment that prohibited employees from discussing pay would be rendered void. 

“The bill would not force anyone to discuss their pay, but it would make sure that bosses could not pressure their employees to stay quiet, or take any action against them if they do discuss their pay,” Senator Waters wrote in the bill’s explanatory memorandum. 

There is a gender pay gap (expressed as a percentage of men's earnings) in Australia between male and female average weekly full-time equivalent earnings. The estimated size of this gap varies between experts and by calculation methodology. According to the Workplace Gender Equality Agency (WGEA), there is a full-time base salary gender pay gap of 19.1%.

Secrecy sustains the gap


Supporters of the bill argued that pay secrecy helps to sustain the gender pay gap.

For instance, the gender pay gap in the government sector is 12% (compared to 19% in the private sector). In the government sector, pay is generally set by collective agreements, which are public documents. Supporters of the bill also argue that pay transparency increases levels of organisational trust, motivation, performance and efficiency.

Opponents of the bill include the Australian Federation of Employers and Industries, the Motor Trades Association of South Australia and the Australian Industry Group.

They argued the bill should be rejected as it is based on a flawed premise that non-disclosure of pay is a direct cause of the gender pay gap; that the bill is superfluous; and that it would undermine the ability of organisations to manage workplace performance and maintain harmony. 

The four Coalition (Liberal/National) Senators recommended the bill should not pass; the two dissenting Labor Senators recommended it should pass with some drafting amendments; and the two Greens Senators also recommended the bill should pass.
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