Equality Bill: gagging clauses – will banning them work?

The government White Paper on the Equality Bill was published on 26 June 2008. And although it doesn’t go as far as some employers had originally feared, the clear message is that the government is committed to working to achieve equality in the workplace.

One of the key purposes of the Equality Bill will be to outlaw gagging clauses, which prevent employees from discussing their pay. The government hopes that this will lead to greater transparency and will enable employees to see whether they are being paid comparable salaries to other employees in similar positions.

But will this really have any significant impact in practice?

The vast majority of employees are not subject to gagging clauses in any event, and even where they are these are usually contained in non-contractual documents, making it difficult for the employer to take any real action in relation to any breach of the clause.

In many ways, it is simply British culture that leads to secrecy regarding pay, rather than because employers impose gagging clauses on their employees – most people simply do not wish to share information about private matters such as salary with colleagues.

Setting these arguments aside, are employees being given any real new benefit by the banning of gagging clauses? There are already a number of measures in place to enable employees to seek relevant information if they suspect that they may not be being paid the same as their colleagues for the same or similar work. For example, employees can already submit equal pay questionnaires to their employers, obliging the employer to provide information relating to pay. If employers refuse to answer or are evasive in their answers, a tribunal may make an adverse inference against the employer. If employees feel that they have been discriminated against, they can bring claims either under the Equal Pay Act or under other discrimination legislation.

Overall, the mere prohibition on gagging clauses will not result in significant changes in practice, and it is likely that employees will remain reluctant to discuss pay with colleagues. Of course, individual employees’ pay cannot be made public without their consent, as this would be contrary to the duties of confidentiality and data protection that employers owe to employees. What the prohibition on gagging clauses will do, however, is to at least publicise the principle of transparency and encourage employees to think about the issues.

Thomas Ince, partner, and Kate French, associate, Reed Smith employment team

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