Australia: New reforms to paid parental leave, including introduction of 'Dad and Partner Pay' - 28 Mar 2012

Industrial and Employment Law Alert
Last Updated: 30 March 2012

By Andrew Tobin, Partner; Troy Wild and Dominique Lamb

In November last year, the Federal Government introduced proposed legislation to amend both the Paid Parental Leave Act 2010 and the Fair Work Act 2009. This first round of proposed reforms sought to, among other things, refine and clarify the provisions in both Acts related to 'keeping in touch days' for those taking parental leave, and clarify various unpaid parental leave arrangements under the Fair Work Act.

On 22 March 2012, the reforms were reintroduced into Parliament, along with additional proposed changes, in a new Bill: the Paid Parental Leave and Other Legislation Amendment (Dad and Partner Pay and Other Measures) Bill 2012.

The Dad and Partner Pay Bill proposes a new payment under the Paid Parental Leave Act: a two week paternity leave payment for eligible working fathers and partners, to apply from 1 January 2013 for children born or adopted after that date.

Here, partner Andrew Tobin and solicitors Troy Wild and Dominique Lamb discuss the changes introduced by the Dad and Partner Pay Bill.

Key points

The Paid Parental Leave and Other Legislation Amendment (Dad and Partner Pay and Other Measures) Bill 2012 proposes, among others, the following changes to laws relating to paid and unpaid parental leave:

  • The introduction, from 1 January 2013, of two weeks' paid paternity leave for eligible working fathers and partners. Entitlement to this leave will be subject to the same qualifying criteria and conditions applicable to paid parental leave for primary carers.
  • The insertion of new rules into both the Paid Parental Leave Act and the Fair Work Act related to the ability of workers taking paid or unpaid parental leave to perform some paid work during the leave period without affecting the leave entitlement or period.

Background to the reforms

The Paid Parental Leave Act, which came into effect on 1 January 2010, introduced the Paid Parental Leave Scheme. The Scheme now enables a worker parent to apply for up to 18 weeks government-funded paid parental leave at the National Minimum Wage (currently $15.51 per hour, or $589.30 per week for a full-time employee).

While the Paid Parental Leave Scheme remains administered and funded by the Family Assistance Office, since 1 July 2011 employers have been required to provide parental leave pay to eligible employees. It is the responsibility of the Family Assistance Office, however, to ensure that funds are made available to an employer in advance of the employer's obligation to provide paid parental leave.

Dad and Partner Pay

The Dad and Partner Pay Bill will see eligible fathers and partners entitled to two weeks government-funded 'dad and partner pay', also paid at the rate of the National Minimum Wage.

Those eligible for the dad and partner pay include adoptive parents and same sex partners who are caring for a child born or adopted from 1 January 2013. Eligible fathers and partners must care for the child ether primarily or jointly with the other parent, and must not be working or on other paid leave while receiving the payment.

This scheme will be open to fathers and partners who are employed on a full time, part time, casual, seasonal, contract or self employed basis. They will be required to meet the same work and residency requirements, as well as the income test, currently detailed in the Paid Parental Leave Act. The entitlement will be additional to any corresponding employer-funded paid leave (although, as with voluntary employer-funded paid parental leave, employers will be able to offset the new entitlement against their voluntary schemes should they wish to do so).

Parents 'keeping in touch' with their employer

Under the Paid Parental Leave Act, a parent is not able to work while receiving paid parental leave, but may keep in touch with the workplace for up to 10 days between the birth or adoption of their child and the end of their paid parental leave period. Effectively, outside of the 'keeping in touch days', when a parent returns to work, paid parental leave will stop.

Currently, the Paid Parental Leave Act provides that a parent may return to work without losing parental leave pay where:

  • the purpose of performing the work is to enable the parent to keep in touch with his or her employer in order to facilitate a return to work after the end of the period of leave;
  • both the parent and the employer consent to the parent performing the work; and
  • the return to work day is not within 14 days after the day the child was born or on placement of the child in the case of adoption.

Even though the Fair Work Act provides for:

  • unpaid parental leave of up to 12 months;
  • the right for eligible parents with responsibility for a child to request flexible working arrangements; and
  • employee protection against discrimination (including protection against discrimination on the basis of parental responsibilities),

the Act is silent about keeping in touch during periods of parental leave.

The Dad and Partner Pay Bill introduces amendments that aim to refine the legislation related to the Paid Parental Leave Scheme, aligning the relevant Fair Work Act provisions as a result.

Paid Parental Leave Act amendments

The Dad and Partner Pay Bill amends the Paid Parental Leave Act to provide that a 'keeping in touch day' must not be within:

  • 14 days after the child was born (or upon placement of the child in the case of adoption) if the employee suggested or requested that he or she perform work for the employer on that day; or
  • 42 days after the day the child was born (or upon placement of a child in the case of adoption) otherwise.

The amendment is intended to allow sufficient time after the birth (or adoption) of a child for the mother to recover physically, and will enable an uninterrupted six-week period for the caring parent to bond with their child. The exception - that a 'keeping in touch day' can occur, at the initiative of a parent on paid parental leave, at any time 14 days after the day the child was born (or placed, in the case of adoption) - is intended to retain flexibility for employees.

In any case, where a 'keeping in touch day' is requested, both the employee and the employer must agree to the performance of paid work on a day that would otherwise be a leave day. Further, the employer remains obliged to pay the employee (in addition to their parental leave pay) for performing work on any 'keeping in touch day'.

Fair Work Act amendments

The Bill proposes to amend the Fair Work Act to, among other things, enable early commencement of unpaid parental leave, and enable employees who are on unpaid parental leave to perform permissible paid work for short periods for the purposes of keeping in touch.

The amendments will enable pregnant employees, if they wish, to start unpaid parental leave more than six weeks before the expected date of birth, where the employer agrees.

Specifically, the Fair Work Act will be amended to provide that, for a pregnant employee, unpaid parental leave may start earlier than six weeks before the expected date of birth of her child if the employee and employer agree, but otherwise may start up to six weeks before the expected date of birth and must not start later than the date of birth of the child.

The Bill proposes the insertion of two new sections, 79A and 79B, into the Fair Work Act, which provide that:

  • an employee is not prevented from performing work on a 'keeping in touch day' while he or she is taking unpaid parental leave;
  • performing work on a 'keeping in touch day' does not break the continuity of the period of unpaid parental leave;
  • reflecting the position under the Paid Parental Leave Act, an employee who performs work on a 'keeping in touch day' is entitled to payment from their employer for that work (additional to any parental leave pay entitlement) in accordance with a relevant contract of employment or industrial instrument; and
  • taking paid leave or performing work on a 'keeping in touch day' during a period of unpaid parental leave does not extend the period of unpaid parental leave.

The Bill also amends the Fair Work Act to clarify unpaid parental leave arrangements where there is a stillborn or infant death.

Where to from here?

Employers need to be aware of the Paid Parental Leave Scheme and the various obligations owed to employee parents, including:

  • providing parental leave pay to eligible employees;
  • having an understanding of when an employee can (and cannot) perform work on a 'keeping in touch day'; and
  • having an understanding of the interaction between the Paid Parental Leave Scheme under the Paid Parental Leave Act and unpaid parental leave afforded under the Fair Work Act.

Employers should watch for ongoing legislative changes in this area and continue to be vigilant in reviewing their parental leave arrangements and how they are practiced and documented in their workplaces - for example, in relevant policy materials. When necessary, steps should be taken to implement any changes required to ensure legislative compliance.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

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.

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