Update: Introduction of Flexible Parental Leave Post COVID-19

By Renee Karakinos, Lawyer

On 16 June 2020, the Federal Government passed the Paid Parental Leave Amendment (Flexibility Measures) Act 2020 which amends the paid parental leave scheme, enabling greater flexibility for eligible working parents in how they take their paid parental leave (PPL).

Furthermore, on 3 September 2020, the Federal Government introduced the Fair Work Amendment (Improving Unpaid Parental Leave for Parents of Stillborn Babies and Other Measures) Bill 2020 (the Bill) to improve the unpaid parental leave (UPL) entitlements of all eligible parent employees.

Paid parental leave flexibility

The PPL scheme is a Government-funded payment consisting of:

  1. Parental Leave Pay (PLP), an 18 week payment at the rate of the national minimum wage for eligible primary carers of newborn and recently adopted children; and
  2. Dad and Partner Pay, a two-week payment at the rate of the national minimum wage for eligible fathers and partners caring for newborn or recently adopted children.

From 1 July 2020, eligible employees are now able to take the 18 week PLP as follows:

Non-flexible PPL period: 12 weeks (60 week days), which must be taken in the 12 months following the birth or adoption of the child.

Flexible PPL period: A maximum of 6 weeks (30 days), which can be taken any time after the initial period and within 24 months of the birth or adoption of the child.

In other words, eligible employees can now split their PLP so they can take it over 2 years.

Unpaid parental leave flexibility

Extension of UPL eligibility

Currently, the Fair Work Act 2009 (Cth) (Act) provides eligible employee parents with an entitlement to up to 12 months’ job protected UPL associated with the birth or adoption of a child if they have, or will have, the responsibility for the day to day care of the child.

If an employee has started birth-related UPL and their child is either stillborn or dies, they are entitled to remain on UPL unless their employer directs them to return to work with 6 weeks’ notice.

If the Bill is passed by Parliament, employees who suffer a traumatic event will have the same UPL entitlements as all other eligible employees, namely they will be able to take their full 12 months of UPL.

Flexible unpaid parental leave

The Bill also allows all eligible parent employees to take up to a maximum of 30 days of their 12 month entitlement to UPL flexibly until their child turns two, including on a one day-at-a-time basis.

Once an employee has accessed the 30 day flexible UPL, they will no longer be able to access any other form of UPL in relation to that child (i.e. the first 11 months of continuous UPL must be taken first).

The employee will be required to give notice to their employer of their intention to take flexible UPL:

  1. at the same time the employee gives notice in relation to commencing UPL; or
  2. otherwise, at least 10 weeks before starting the flexible UPL (unless the employer agrees to a later day).

The employee will also be required to give their employer written notice of the particular day on which the employee will take flexible UPL:

  1. at least 4 weeks before the day the employee will take flexible UPL; or
  2. if that is not practicable, as soon as practicable.

Note that eligible employees who wish to make a permanent change to their working arrangements after returning from UPL can request a flexible working arrangement which an employer may only refuse on reasonable business grounds.

Conclusion

The measures outlined in the Bill ensure that parents who wish to claim flexible PLP have access to a corresponding flexible unpaid leave entitlement. We therefore expect for the Bill to receive royal assent in the next couple of months, noting the amended PPL scheme commenced 1 July 2020. 

It is necessary for all employers and employees to understand their entitlements and obligations with respect to the Australian Government Parental Leave scheme and Unpaid Parental Leave.

For more information, please contact our Employment Law team by email or on telephone +61 8540 0200.