Are salary confidentiality clauses on the way out?

Both companies cited pay equity as the reason for the move

Are salary confidentiality clauses on the way out?

Australia’s banking sector is taking steps to combat gender equality in the workplace. Westpac Banking Corp said last week new hires have been onboarded at Westpac without the pay confidentiality clause since December and that from April, pay confidentiality clauses will no longer apply to existing employee contracts, leaving employees free to discuss their salaries with other employees if they want to.

Just days later, Australia’s largest bank, Commonwealth Bank of Australia made a similar move, telling employees that from April 11, they would be free to discuss their salary rates but warned against pressuring people to talk about the topic if they didn’t want to.

Both companies cited pay equity as the reason for the move. Last month, a report from the Workplace Gender Equality Agency found that men are twice as likely to be paid highly than women.

Westpac said the increased transparency would be another step in reducing the risk of bias against women in the workplace.

Commonwealth Bank of Australia said it was part of the bank’s commitment to identify and address any perceived or actual pay inequity, but the changes come amidst concerns from the union last month, that managers were disciplining workers who were discussing their pay.

In a statement to HRD, a Commonwealth Bank of Australia spokesperson said, “Last week we let our people know that as part of our commitment to identify and address any perceived or actual pay inequity, we have decided to remove the pay confidentiality clauses from new contracts and waive the obligation for confidentiality in all current ones. These changes will take effect from Monday 11 April as part of our contract simplification program. We have been publicly disclosing our gender pay equity outcomes for the past five years with the most latest figures in our 2021 Annual Report. On an aggregate level, CBA already had gender pay equity on a like-for-like basis.”

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