The Fair Work Act 2009 has significantly amended the Federal Government's previous approach to an employee's entitlement to take leave upon the birth of a child. This reflects the changes in Australian society since the introduction of the first legislated parental leave entitlements in 1979. The 'normal' family unit no longer consists of dad going to work and mum staying at home to look after the children and so the terms 'maternity leave' and 'paternity leave' no longer exist in Australian legislation. A parent's entitlement to take leave upon the birth, or adoption, of a child is now referred to as 'parental leave' and is equally available to mum, dad, step-parents and adoptive parents whether they be married, de facto, same-sex or otherwise.
Following on from these changes, the Paid Parental Leave Bill 2010 was passed by the Federal Parliament in July 2010, introducing Australia's first government-funded national paid parental leave scheme. This continues the government's recent focus on the 'modern family unit', recognising the changing roles of parents.
The new government-funded scheme
Paid parental leave will be available to the 'primary care-giver' of a child born or adopted after 1 January 2011. It is payable for up to 18 weeks at the national minimum wage, currently $569.70 gross per week, within the first 12 months after the birth or placement of an adopted child. The parent must be an Australian resident, have earned $150,000 or less in the previous financial year and must meet the Paid Parental Leave Work Test. This test requires that the parent worked continuously for at least 10 of the 13 months prior to the birth or adoption of the child and worked for at least 330 hours in that period with no more than an eight-week gap between two working days.
Paid parental leave entitlements will cease if the parent returns to work; however, the parent can participate in workplace activities, and receive wages, for up to 10 days without affecting their entitlement. The entitlement can also be transferred from one parent to another.
While the Federal Government will fund this scheme, after 1 July 2011 the administration of payments will generally be by the employer. Employers should review the 'Business Requirement Statement' provided by the Family Assistance Office to ensure they are able to meet the government requirements for administering the scheme.
If a person has been employed for less than 12 months, is entitled to receive less than eight weeks of Parental Leave Pay or is not employed, payments will be made by the Family Assistance Office.
The government-funded 'baby bonus' will also continue to be available; however, only one option will be payable for each child. Employees eligible for the paid parental leave scheme can choose which benefits they wish to receive.
Paid leave by employer will usually continue
In most cases the entitlement to receive paid parental leave through the government scheme should not affect paid parental leave provided by an employer. An employer cannot withdraw an entitlement to employer-funded paid parental leave available through an industrial instrument or employment contract during the life of that instrument or contract. However, whether a policy of paid parental leave (as found in an employer's HR or staff policies) is an employee entitlement or can be withdrawn unilaterally would depend on the wording of individual policy documents and practices within that employer. These situations would need careful consideration on the individual facts, and legal advice should be obtained wherever there is uncertainty.
An employee's entitlement to receive paid parental leave under the Paid Parental Leave Act 2010 should not be confused with an employee's entitlement to take parental leave pursuant to the Fair Work Act 2009. The qualifying requirements are quite different and being eligible for one does not necessarily mean an employee is eligible for both.
Carroll & O'Dea has produced a Parental Leave Guide to help employers and their employees track their way through these complex changes. You should have received your free copy of the Guide with this month's edition of Human Capital. Please contact Carroll & O'Dea if the Guide was not received with this magazine, or if you would like more copies of the Guide.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.