11 April 2013 Employees having Children

By Warwick Ryan, Partner and Laura Sowden, Solicitor

In Brief

When employees have children (either via them or a partner giving birth or through adoption) there are a number of consequences for the employment space. Under the Fair Work Act 2009 (Cth) employees can access unpaid parental leave and a number of other entitlements. There are also certain obligations for employers.

Unpaid Parental Leave Basics

As a starting point, employees who have completed 12 months of service with their employer are entitled to 12 months unpaid parental leave if:

  • They or their partner give birth to a child or have accepted placement of an adopted child; AND
  • The employee has or will have a responsibility for the care of the child.

It is vital to remember that parental leave can be requested and granted to male and female employees and employees can request to extend leave in some circumstances. There are additional entitlements and requirements for different situations regarding child birth, childcare and adoption.

Case Study – Fair Work Ombudsman v W.K.O Pty Ltd [2012] FCA 1129

Late last year the Fair Work Ombudsman brought proceedings on behalf on an employee at a child care centre. When the employee requested unpaid parental leave from her employer her hours of work were reduced and she was refused unpaid parental leave.

The employer told the employee she had not worked for the employer for a period of 12 months and thus was not entitled to unpaid parental leave. However, there had been a transfer of business and as such the employee's length of service with the previous business carried over. This meant she had 2 years service and was entitled to unpaid parental leave.

The employer was aware of this transfer and misrepresented to the employee that she was not entitled to unpaid parental leave. The employee was also told by her employer that she would need to resign. The Court made an order that the employer pay $13,200 in penalties for breaching the Fair Work Act and $5,000 in compensation for the employee.

It is significant that in the event the employer did not pay those amounts within 30 days the Director of the employer who was also involved in the contraventions would have to pay the amounts.

What is the return to work guarantee?

Employees on unpaid parental leave are subject to a return to work guarantee. This means an employee returning to work from unpaid parental leave is entitled to either:

  • The employees position as it was prior to going on parental leave; OR
  • If that position no longer exists – an available position which the employee is qualified and suitable that is nearest in status and pay to the position they held prior to going on parental leave.

As such employers must be careful when planning the parental leave period of an employee ensuring they keep in minds the requirement to return the employee to their previous position or one suitably similar.

Consulting with Employees while they are on Unpaid Parental Leave

While an employee is on unpaid parental leave an employer must consult with that employee if they make a decision which will have a significant effect on the status, pay or location of the employee's pre-parental leave position. So employers must consider employees on unpaid parental leave and how any workplace changes will affect them.

In this context to consult with the employee means an employer must:

 "take all reasonable steps to give the employee information about, and an opportunity to discuss, the effect of the decision on that position."

This means employers should be careful about the changes they make to their organisational structure which may impact employees on parental leave and should contact those employees if such changes occur while they are on parental leave.

Case Study – Fair Work Ombudsman v Tiger Telco Pty Ltd (in Liq) [2012] FCA 479

In this case an employer did not consult the employee (who was on unpaid parental leave) when they decided to appoint someone else to her position. As a result of the appointment the employer did not return the employee to the position she held prior to her period of unpaid parental leave. She was offered an alternate position which was however located some 70km's away from her home.

The Court held these decisions were made because of the employee's pregnancy and/or family responsibilities. It is significant that the Fair Work Ombudsman brought the action against the Managing Director and the Court ordered the Managing Director pay a penalty of $5,940 to the employee.

How do flexible working arrangement requests work?

If an employee who is a parent has responsibility for the care of a child who is under school age (or under 18 and has a disability) they may request a change in working arrangements.
A change in working arrangements (otherwise known as flexible working arrangements) can include:

  • Change in hours of work
  • Changes in patterns of work
  • Changes in location of work

The Fair Work Ombudsman considers that a reduction in the hours of work, job sharing arrangements and working from home are examples of changed working arrangements.

NOTE: casual employees are not entitled to make a request unless they are a long term casual who reasonably expects continuing employment on a regular and systematic basis.

  1. The Employee makes a request.

The request must be in writing, set out the details of what changes the employee seeks and the reasons why.

  1. Employer responds

Following the receipt of a request an employer must give the employee a written response within 21 days as to why they are granting or refusing the request. The request must only be refused on reasonable business grounds.

So aside from providing reasonable business grounds, which is not a high threshold, there is no requirement that an employer agree to a request for a change in working arrangements. However, there are several reasons why employers should seriously consider any such requests:

  • The relationship of good will between an employee and employer can often be enhanced through compromises which result in an outcome which suits both parties. While the request may be a nuisance to the employer it may be of the utmost importance to the employee.
  • Employees whose requests are refused can bring an application for the Fair Work Commission to mediate the dispute.
  • Employees whose requests are refused may bring a claim of discrimination on account of sex or family responsibilities. Such a claim can be advanced in a number of forums; using the general protections in the Fair Work Act and state or federal anti discrimination legislation.
Things to Keep in Mind
  • Be aware of responsibility to return employees on unpaid parental leave to their former position or suitable alternative.
  • Consult with employees on unpaid parental leave concerning workplace changes which will affect their position.
  • Directors should be aware that if they contribute to discriminatory conduct under the general protections provisions of the Fair Work Act they may be personally liable.
  • Flexible working arrangement requests must be considered and the decision not to grant the request may not be the end of the matter.
  • The Fair Work Ombudsman has and will take employers to Court regarding contraventions of the Fair Work Act.  

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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