Nearly a fifth (18 per cent) of UK workers have been told they’re not allowed to discuss what they earn with colleagues, leading to calls for more transparency around pay.
The poll of 2,000 workers, conducted by the TUC and research company GQR, also found that half of workers (50 per cent) did not know what senior managers in their organisations earned, and 53 per cent were not given information about co-workers’ pay.
Just 18 per cent reported their workplace had a transparent pay policy, where salary details were available to everyone through an official source.
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The TUC has called for the government to commit to introducing tougher pay transparency measures, including a ban on secrecy clauses and on gagging clauses preventing discussions about pay, arguing this would empower employees when challenging unfair pay.
Frances O’Grady, the TUC’s general secretary, described pay secrecy clauses as a “‘get out of jail free’ card for bad bosses”.
“They stop workers from challenging unfair pay, allow top executives to hoard profits and encourage discrimination against women and disabled people,” O’Grady said. “Talking about pay can feel a bit uncomfortable, but more openness about wages is essential to building fairer workplaces.”
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Duncan Brown, head of HR consultancy at the Institute of Employment Studies (IES), pointed out the Equality Act already provides some protection for workers, rendering pay secrecy clauses enforceable if the employer is trying to prevent a ‘relevant pay disclosure’, and said a culture of pay transparency was the best way of building trust in pay decisions among employees. “People will only trust their pay is fair if they understand and can see how it is determined and how their pay relates to that of others,” he said.
He added firms were also “limiting the motivational impact of their rewards if they discouraged discussions on pay”, noting the direction of travel from an employment law perspective was towards greater transparency, pointing to gender pay gap and CEO pay ratio reporting requirements as evidence of this.
But Emma Bartlett, partner at Charles Russell Speechlys, told People Management banning secrecy clauses alone would not improve pay transparency. “Placing the onus on an individual worker to root out discrimination is not an effective way of reducing discriminatory pay decisions,” she said.
“As demonstrated by the compulsory gender pay gap reporting, the key would have to be pushing companies to publish meaningful data on levels of pay in certain roles, so that a proper analysis can be undertaken.”.
Kate Palmer, associate director of advisory at Peninsula, said pay secrecy clauses could be beneficial to employers, and there was no indication the law around them was going to change soon. “Banning conversations on differences in wages can help prevent arguments or disputes arising at work,” she said.
But she also warned that salary confidentiality may not be well received by a workforce, highlighting that employers should have nothing to fear from staff discussing salaries if they can show a clear rationale behind why one individual is paid more than another.