International Comparison - to the UK, Canada and NZ systems
The Paid Parental Leave Bill 2010 (Cth) will introduce the first statutory paid parental leave scheme for the private sector in Australia.
Paid maternity leave – A mother may be eligible (if she has worked for 10 of the 13 months prior to the birth/adoption of her child) to up to 18 weeks parental leave pay at the national minimum wage which is currently $569.90 per week.
Paid parental leave – The legislation allows all or part of the mother's parental leave to be transferred to the child's other parent, provided they also meet the eligibility requirements and are the primary carer of the child.
Unpaid parental leave – Under the Fair Work Act 2009 (Cth), parents are entitled to up 12 months unpaid parental leave subject to completing a minimum of 12 months continuous service with the employer prior to the birth of the child.16 Both parents may take their leave concurrently, subject to a number of conditions.17
New Zealand parental leave entitlements are governed by the Parental Leave and Employment Protection Act 1987 (NZ). Payment is from public monies and must be paid into the New Zealand bank account specified by the employee applicant
Mothers are entitled to a maximum of 52 weeks maternity leave which includes both paid and unpaid leave as outlined below.
Paid maternity leave – The current entitlement is 14 weeks at up to NZ$441.6218.
Unpaid maternity leave – 38 weeks (52 weeks minus 14 paid weeks).
Unpaid paternity leave – Fathers/partners have an entitlement to a maximum of 2 weeks' paternity leave (subject to being employed for at least 12 months by the employer – 1 week where they are employed for more than 6 but less than 12 months.) However, fathers/partners can also extend their leave where the mother transfers some of her unpaid leave to the partner.19
As noted by the PCI, "an evaluation of New Zealand's PPL scheme (14 weeks) also found that it was rare for mothers to transfer their partners."20
Canada's paid parental leave scheme is administered through Canadian Employment Insurance (EI).
EI provides temporary financial assistance for unemployed Canadians including, but not limited to, those who are sick, pregnant or caring for a newborn or adopted child.
To qualify for the benefits, the parent is required to have accumulated 600 insured hours in the last 52 weeks since their last claim.
Maternity Leave – The current entitlement to paid maternity leave is 15 weeks paid at 55 per cent average insured earnings up to a yearly maximum insurable amount of CAN$43,200.21
Paid parental leave – Parents are entitled to 35 weeks paid parental leave. This benefit can be claimed by one parent, or shared between the two, but cannot exceed the 35-week period.
Through a combination of maternity (paid for a maximum of 15 weeks) and parental benefits (paid for a maximum of 35 weeks) a mother/surrogate can take up 50 weeks of paid leave.22 Based on the above rate, a mother can receive a maximum payment of CAN$457 per week for 50 weeks (15 weeks maternity plus 35 weeks parental leave.
The Canadian province of Quebec also has its own parental leave scheme known as the Quebec Parental Insurance Plan (QPIP). QPIP is an income replacement scheme paid for wage earners who pay a premium of 0.506 per cent to Revenu Quebec.
QPIP cannot be claimed in addition to EI benefits, rather, it replaces EI in relation to parental or maternity benefits.
The plan calculates a wage earners benefit subject to the maximum insurable earnings of $62,500 for 2010.
Under the QPIP:
- Mothers are entitled to 18 weeks paid maternity leave at a rate of 70 per cent of their income
- Fathers are entitled to 5 weeks paid paternity leave at a rate of 70 per cent of their income
- Parents are entitled to 32 weeks parental leave (which may be shared between the parents) paid at 70 per cent of the parents income for the first 7 weeks and 55 per cent for the remaining 25 weeks, and
- Where parents adopt a child, the parents may share 37 weeks leave which is paid at a rate of 70% of the parent's income for the first 12 weeks and 55 per cent for the remaining 25 weeks.23
Paid maternity leave – Current entitlement is 39 weeks paid and was due to rise to 52 weeks paid in April 2010 but has been postponed indefinitely.24 Payment consists of 6 weeks at 90 per cent of full pay and remainder at a flat rate (£124.88) or 90 per cent of gross weekly earnings if that is less than the flat rate)25.
Paid paternity leave – 2 weeks at a fixed amount (£124.06).26
Unpaid maternity leave - 26 weeks (maternity or adoption) for a total of 52 weeks (paid and non-paid). Mothers are also entitled to take at least 4 weeks per year non-paid or, if they have at least one year's continuous employment, a maximum of 13 weeks' unpaid via a parental leave request.
Unpaid paternity leave - None. A spouse or partner can request up to 4 weeks' non-paid Parental leave annually (maximum: 13 weeks) if they have at least one year's continuous employment.27
Next Steps for Employers
Employers should prepare for the introduction of PPL.
Any pregnant employees (or expectant parents intending to take PPL) should complete application forms.
Employers should review any policies, contracts and industrial instruments they have which currently provide for paid parental leave to determine what their obligations will be when the PPL scheme commences.
It is understandable that, as a matter of public policy, the Government does not see employee entitlements going backwards. However, forcing employers who have been generous in their own scheme offerings to add the Commonwealth scheme on top of a scheme that already replaces wages for typically 8 or 12 weeks is arguably unfair. Employers with non-contractual and non-industrial instrument schemes may elect to provide both entitlements simultaneously, or reduce the benefits under its scheme – for instance by the amount of the national minimum wage, so that the employer tops up to replacement wage for its PPL period.
Further, all employment contracts can be reviewed with the consent of both parties. Where employer-paid parental leave is provided in a policy or contract of employment, it is recommended that the policy and contract be reviewed to determine how the employer-paid scheme can operate in conjunction with or to supplement the Government-funded scheme. In the event that an employer wishes to revisit the amount and terms of parental leave it provides in a policy or an employment contract – such as to provide that any policy is reduced by the Government-provided scheme, rather than providing both employer-funded and Government-funded schemes - a review should occur so that employers do not inadvertently breach the law by revoking an entitlement.
Where an employer provides a paid parental leave entitlement via an industrial instrument (such as a collective agreement or AWA or ITEA), the employer cannot withdraw that entitlement for the life of the instrument. Particular advice should be taken if an industrial instrument specifies that if a Government scheme is introduced, employer-paid parental leave will be withdrawn (or provided to supplement the Government scheme).
While employer-paid parental leave cannot be withdrawn during the life of an industrial instrument, in bargaining for a new instrument, it is open to the parties to modify obligations providing for employer- provided PPL subject to the usual industrial factors that will impact those negotiations.
16 Chapter 2, Part 2-2 Division 5 of the Fair Work Act 2009 (Cth)
17 Fair Work Act 2009 (Cth) s. 72(5)
19 Parental Leave and Employment Protection Act 1987 (NZ), s.19A.
20 Australian Government Productivity Commission website - Inquiry report – key points here
23 QPIP table
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.