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Can you prevent your employees openly discussing their salary?

Due the cost of living and inflation employees are more concerned about their earnings and will often question if they are on a fair wage. Discussions will take place between colleagues, and this may cause alarm to employers as they may be concerned about resulting grievances.

To manage this situation employers should be committed to pay transparency to enable open discussion of this topic. Being secretive is counterproductive and can damage your relationship with your employees. Explaining why wages are set at the level they are enables employers to manage staff expectations.

Article 141 of the EU Treaty declares both men and woman have the right to equal pay for equal work. The Equality Act 2010 implements this principal in the UK. The law implies into an employee’s contract equality of pay for both men and women. Any attempt to implement a term which is less favourable to a man or woman will be a breach of the law. Employees can make a request for disclosure of pay information about other staff both past and present. Any clause to prevent this will be unenforceable. The law will protect employees against victimisation where they make such a pay disclosure.

The Employment Appeal Tribunal has given guidance when it is possible to include a pay secrecy clause which bans employees from disclosing their pay details with colleagues. A breach of such a clause can result in disciplinary action. In Jagex Ltd v McCambridge the Employment Appeal Tribunal explained these points. The employee Mr McCambridge came across a visa application form on a photocopier. It contained the details of another employee’s salary. He removed the document and later disclosed its content to another employee. The following day he showed the document to two further employees and then placed the document in a confidential waste bin.

During his disciplinary hearing Mr McCambridge admitted what he had done and apologised. He argued he did not believe the information to be confidential as his contract did not specifically say salary details were confidential or discussing it was a ground to dismiss him. The employer disagreed and dismissed him resulting in his claim for both unfair and wrongful dismissal. The Employment Appeal Tribunal found in Mr McCambridge favour. It upheld his unfair dismissal claim as the information was not stated in the contract as confidential. This meant it was a summary dismissal and upheld his claim for wrongful dismissal.

Employers should take this case as a warning. There must be an express clause in the employees’ contract which allows salary information to treated as confidential information resulting in potential disciplinary action for a breach of the clause. Employers should therefore check the contract and get legal advice before undertaking any disciplinary action. It is important to note that such a clause cannot stop or prevent discussions in relation to investigating pay discrimination in relation to an equal pay claim or protected characteristic. Enforcing the clause in these circumstances will result unlawful victimisation.

Employers should always take legal advice as it can be difficult to distinguish between genuine pay discussions and relevant pay disclosures. Employers should have their clauses checked for validity to prevent them finding themselves in a difficult position. This article is for guidance and does not constitute legal advice. Should you require legal advice, or your HR documents updated please contact the Quest advice line for help.