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Pay secrecy clauses - a get out of jail card for bad bosses

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Pay secrecy or ‘gagging’ clauses stop workers from challenging unfair pay and discrimination. They must be banned.

We believe everyone should get fair pay at work. That means equal pay for work of equal value and an end to pay discrimination and to fat cat salaries.

However, in the UK today:

  • FTSE 100 CEOs earn 117 times the pay of a median full-time worker
  • The gender pay gap is 17.3% and, at this rate, won’t close until 2058
  • The pay gap between disabled and non-disabled workers is 16%

At the TUC we believe this isn’t right, and that all workers have a right to know if they are being paid unfairly.

However, new research by the TUC found that 1 in 5 workers have been told they can’t talk about their pay at work - a sign that pay secrecy or ‘gagging’ clauses are all too common in employment contracts.

The Equality Act 2010 placed restrictions on pay secrecy clauses, making them unenforceable if an employee discussed pay in order to find out if they are being paid less than colleagues for discriminatory reasons.

Despite this, we are seeing a chilling effect on workplace discussions on pay that is silencing workers and preventing them from finding out about and challenging unfair pay, discrimination and top-to-bottom pay inequalities.

Pay transparency

Increasing pay transparency is a key part of the fight against unfair pay, helping to expose the many different forms of pay discrimination and inequality workers face.

In countries like Sweden and Finland people can find out what their colleagues earn through publically accessible tax returns.

The European Union is considering trade union backed plans for new legislation on pay transparency as part of its commitment to reducing the gender pay, earnings and pensions gaps.

The pensions of women in the EU are 36% less than men’s due to pay inequality and because nearly 1 in 3 women in the EU work part-time.

Publishing pay data is not enough in isolation to ‘strip away’ the bias and discrimination that causes equal pay issues. First, we need strong collective bargaining rights.

Transparency provides an effective collective bargaining tool for workers and their trade unions, and facilitates potential legal action against employers who discriminate.

That is why we are calling on the government to change the law to stop employers from banning workers talking to each other about their pay, no matter what the reason.

No more secrecy, no more hiding inconvenient truths about arbitrary pay decisions, an end to discriminatory ideas about who deserves what.

How can we fix this?

We want to see an end to practices that allow massive pay inequalities to go unchallenged.

The TUC is calling on the government to:

  • Ban pay secrecy clauses to make it clear that everyone can talk about their salary and other work benefits, to anyone and for any reason.
  • Stronger union rights so that trade unions can ensure transparent and fair processes for setting pay rates.
  • Commit to introducing the cutting-edge pay transparency measures being considered at European level.