Paid parental leave leg­is­la­tion, unpaid leave and flex­i­ble work arrange­ments under the Fair Work Act

In brief — paid parental leave

A paid parental leave scheme was intro­duced into par­lia­ment on 12 May 2010. It passed the Sen­ate on 17 June 2010. The scheme com­mences on 1 Jan­u­ary 2011.

Con­tin­u­ing enti­tle­ment to unpaid leave and flex­i­ble work arrangements

The Fair Work Act enshrines the right of employ­ees who give birth or adopt to have up to 12 months off work. This peri­od can be shared between par­ents, who can take parental leave either simul­ta­ne­ous­ly or con­sec­u­tive­ly. Employ­ees can make a fur­ther request to their employ­er for an addi­tion­al 12 months of unpaid leave, although the employ­er does not have to agree to this in all cir­cum­stances. Employ­ees can also request flex­i­ble work­ing arrange­ments until the child goes to school. These rights extend to long-term casu­al employees.

At the end of this unpaid leave, an employ­ee has the right to return to his or her job.

All of these can be oper­a­tional­ly dif­fi­cult to man­age but do not have a direct cost to the employ­er because the leave is unpaid.

The paid parental leave system

The paid parental leave leg­is­la­tion does not direct­ly affect the above arrange­ments. It allows all employ­ees who take parental leave to receive pay­ment for up to 18 weeks at the nation­al week­ly min­i­mum wage, cur­rent­ly $569.90.

In order to qual­i­fy for this, the employ­ee must have worked at least 330 hours for the employ­er over the pre­ced­ing thir­teen months, with a break of no more than 8 weeks between two work­ing days, not includ­ing peri­ods of paid leave. Paid parental leave is not avail­able to employ­ees who earn more than $150,000 per year. Employ­ees must also apply to the Fam­i­ly Assis­tance Office for approval.

Fam­i­ly Assis­tance Office

Paid parental leave is fund­ed by the gov­ern­ment through the Fam­i­ly Assis­tance Office but man­aged by the employ­er. The Fam­i­ly Assis­tance Office can send a notice to employ­ers out­lin­ing that they are required to pay an employ­ee parental leave pay. In oth­er cas­es, the Fam­i­ly Assis­tance Office will make the pay­ment to the employ­er but the employ­er will pay the employ­ee. The pay­ment from the Fam­i­ly Assis­tance Office to the employ­er will be before the employer’s pay cycle to alle­vi­ate any poten­tial cash flow problems.

The pay­ments are not sub­ject to super­an­nu­a­tion con­tri­bu­tion oblig­a­tions and they are not assess­able for work­ers com­pen­sa­tion pre­mi­um purposes.

If an employ­er has already sep­a­rate­ly con­tract­ed to pay its staff parental leave, that oblig­a­tion remains.

The scheme also con­tem­plates the employ­er and employ­ee hav­ing up to 10 con­tact days when the employ­ee comes to work for train­ing dur­ing the parental leave.

Paid parental leave — prac­ti­cal tips for employers

The extent to which employ­ers are like­ly to be affect­ed by the intro­duc­tion of paid parental leave depends on a num­ber of fac­tors. The short check­list below may serve as a use­ful start­ing point.

  1. How many of my staff might be tak­ing parental leave in the fore­see­able future?
  2. How many of my staff are like­ly to take the addi­tion­al 12 month peri­od of leave beyond the ini­tial 12 month period?
  3. How easy will it be for me to find tem­po­rary staff to replace those who take parental leave?
  4. If it is not like­ly to be easy to attract tem­po­rary staff to fill the posi­tions of staff on parental leave, how can I make these posi­tions more attractive?
  5. What steps will I need to take to rein­te­grate staff into the work­force after they return from parental leave? 

The greater the pro­por­tion of the total num­ber of staff who might take parental leave in the fore­see­able future, the more impor­tant it is for you to plan for this contingency.

Advance warn­ing of parental leave

While the Fair Work Act states that employ­ees must give at least ten weeks’ notice of their inten­tion to take parental leave, there is no rea­son why employ­ers can­not ask for notice fur­ther in advance. The more dif­fi­cult it is like­ly to be to find suit­able staff to fill tem­po­rary posi­tions, the more sense it makes to ask for more than ten weeks’ notice. Giv­en that the dura­tion of preg­nan­cy is 40 weeks, it would not be unrea­son­able to ask staff plan­ning to take parental leave to give 15 or 20 weeks’ notice of their intentions.

What­ev­er you decide to do, it would be pru­dent to put the pol­i­cy into writ­ing and cir­cu­late it amongst your staff at the ear­li­est opportunity.

Find­ing tem­po­rary staff to fill parental leave positions

The ease with which staff can be found to fill tem­po­rary posi­tions result­ing from per­ma­nent staff tak­ing parental leave will depend on a num­ber of fac­tors, includ­ing the abun­dance or short­age of labour in your indus­try, the geo­graph­ic loca­tion of your busi­ness and the skill lev­el of staff mem­bers who need to be replaced.

Mak­ing tem­po­rary posi­tions more attractive

The obvi­ous way to make a tem­po­rary posi­tion more entic­ing is to increase the salary. How­ev­er, this may not be a prac­ti­cal solu­tion or even a fea­si­ble one.

An alter­na­tive would be replace a full-time posi­tion with two or even three part-time posi­tions, or to find two suit­able can­di­dates who would be pre­pared to job share. While part-time work is more wide­spread than it used to be, it would be fair to say that demand still out­strips sup­ply. Employ­ment con­sul­tants can tes­ti­fy that part-time posi­tions in many indus­tries are in very high demand.

While the neces­si­ty of cre­at­ing part-time or job-shar­ing posi­tions in order to fill a tem­po­rary vacan­cy may seem at first glance to be an annoy­ing incon­ve­nience, it could solve a staffing prob­lem which might oth­er­wise be intractable. It could also have the addi­tion­al ben­e­fit of cre­at­ing a use­ful tal­ent pool for fill­ing oth­er tem­po­rary vacan­cies, cov­er­ing for staff who are on long ser­vice leave or extend­ed annu­al leave and deal­ing with peri­ods of exces­sive work­load in the future.

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