Legality of confidentiality clauses in employee contract.
Querist :
Anonymous
(Querist) 02 August 2021
This query is : Resolved
Hello I have recently learnt that the a lot of private companies use specific confidentiality clauses restricting it's employees to openly discuss about salary within one another. My query is whether this is allowed or is it voidable or void ab initio as this completely defeats the purpose of wage and pay equality for the same role and hours. Any suggestions or advice will be helpful, thanks.
Dr Sanjay Sinvhal
(Expert) 03 August 2021
1. An employment contract is a legally binding contract if it is duly executed. Most companies digitally execute the contract with the employee.
2. Contract terms are legally binding on both parties.
3. Company needs to present its HR practices especially related to Salary to avoid bad blood between employees. This is unlike Govt org where there are defined pay scales. So one needs to honor the contract clauses.
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Querist :
Anonymous
(Querist) 03 August 2021
While I agree and completely understand your first 2 points sir, my query is regarding the inherent nature of the clause. For example a contract to perform an illegal activity like theft despite being written on paper and in agreement is a void act by nature of it being illegal. Hence are there any any provisions in law that specifically deal with equal remuneration and if there are, will this clause attract the application of that provision since the closed off nature of the clause means employees performing the same task with same experience will have varying pay and won't even be allowed to discuss it. Thank you.
Dr Sanjay Sinvhal
(Expert) 03 August 2021
Pvt companies can have different pay for same work depending upon employees experience, last drawn salary, number of years in current org etc. Salary fixation is purely based on negotiations between employee and employer in Pvt companies. It is perfectly legal
P. Venu
(Expert) 03 August 2021
Such conditions, to my knowledge, are opposed to public policy and hence, void.
Advocate Bhartesh goyal
(Expert) 03 August 2021
Such conditions if exists in employment contract then they are void and cannot be enforced.
Querist :
Anonymous
(Querist) 03 August 2021
Dr. Sanjay I understand the circumstances in which salary may differ but what about the fact that the employees are not allowed to discuss their differing salaries? Is that legal as well?
Adv Bhartesh and P. Venu, thank you for your responses as well.
Dr J C Vashista
(Expert) 04 August 2021
The agreement is void and can not be enforced.
