The newly enforced ban on pay secrecy gagging clauses could result in a wave of employees demanding salary increases.
The Equality Act, which came into effect last Friday (1 October 2010), prevents organisations from enforcing contractual agreements that stop employees from discuss their pay with colleagues as long the conversation is intended to uncover instances of discrimination.
According to research from PricewaterhouseCoopers (PwC), almost half (49%) of UK employees would demand a pay rise or quite look for a new job if they found out that colleagues which held positions at the same level were paid more than them.
Michael Rendell, Head of HR Consulting, PwC comments: “Although the provisions in the Equality Act banning gagging clauses were watered down considerably in the final drafting of the legislations, the new rules are put of the growing culture and regulatory drive for greater disclosure around pay.
“A further step in this direction will be the requirement also contained in the Equality Act for private sector employers with more than 250 employees to report their gender pay gap. This obligation is due to come into force in 2013, although it is possible it may happen sooner.”
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