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Are contractual 'pay secrecy' clauses banned under the Equality Act 2010?

Posted on 15th September 2010
New legislation

No. The Equality Act 2010 does not outlaw the use of "pay secrecy" clauses in contracts of employment. Section 77 makes them unenforceable when an employer seeks to prevent employees from making "relevant pay disclosures". These are discussions with colleagues or trade union representatives with a view to identifying unlawful pay discrimination.

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It will be unlawful to victimise an employee for making or seeking a relevant pay disclosure

The clause has been criticised for being too narrow and convoluted. It is doubtful this new provision will achieve its aim of promoting pay transparency because there is no outright ban. It will, however, be unlawful to victimise an employee for making or seeking a relevant pay disclosure.

The new provision allows employers to require employees to keep pay rates confidential from people outside the workplace, for example a competitor organisation.

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