Improving unpaid parental leave

Recent changes have been made to the National Employment Standard (NES) to provide parents with greater flexibility in relation to their unpaid parental leave entitlements, and also to improve entitlements for parents who experience traumatic events during or in anticipation of taking such leave, including stillbirth and premature birth.

Employers should consider updating their parental leave policies to ensure that they accord with these changes to the NES.

Flexible unpaid parental leave

The changes to make unpaid parental leave more flexible have been partly driven by changes made to the Government-funded parental leave payment scheme. From 1 July 2020, the Federal Government changed its paid scheme to provide flexibility for eligible parents who are entitled to 18 weeks of parental leave payment. Those changes allow parents to take:

• the initial period of the first 12 weeks of parental leave payment in a continuous block within 12 months of the birth or adoption; and
• the remaining 30 days (equivalent to six weeks) of their payment at any time after the initial 12 weeks and within 24 months of the birth or adoption.

To ensure a corresponding flexibility with unpaid parental leave under the NES for parents who wish to claim flexible paid parental leave payments, the NES has been amended to also allow parents to take up to 30 days of their entitlement to 12 months unpaid parental leave flexibly, including on a single-day basis, at any time within two years of their child’s birth or placement.

An employer does not have the ability to refuse an employee’s request to take their unpaid parental leave flexibly, such as on the basis of reasonable business grounds. As a result, employers will need to take into account any flexibility requests when considering workforce planning.

Any period of ‘continuous’ unpaid parental leave that an employee requests to take must be taken first however, before the first day of taking any flexible unpaid parental leave.

Parents can still elect to use their full 12 months of unpaid parental leave in one continuous block, which means that that they will have no flexible unpaid parental leave entitlements left to use.

The changes are intended to give families more choice and flexibility in how they choose to combine care and work responsibilities and to promote mothers’ engagement in paid work in the early stages of their child’s life and fathers’ engagement in providing care to their child. We have summarised those changes below:

Stillbirth or subsequent death

The NES now contains improved entitlements for parents of stillborn babies and babies (including adopted children) who die during the first 24 months of life:

• parents of stillborn babies have the same entitlement to unpaid parental leave as parents of live babies, including by allowing these employees to start unpaid parental leave in relation to a stillborn child even if they have not previously given notice to their employer;
• employees in these circumstances who wish to return to work earlier can do so by providing their employer with at least four weeks’ written notice;
• the employee may also cancel their leave before the period of leave starts; and
• employees who are on unpaid parental leave may take compassionate leave following the stillbirth or death of the child.

Employers can no longer direct parents to return to work and cancel their unpaid parental leave in those circumstances.

Hospitalised children

Parents who experience premature birth and other birth related complications that require the baby to be hospitalised immediately following birth are also given improved entitlements if they have given notice that they will take unpaid parental leave.

The entitlement arises if the child is required to remain in hospital after the child’s birth, or is hospitalised immediately after the birth, including because:

• the child was born prematurely;
• the child developed a complication or contracted an illness during the child’s period of gestation or at birth; or
• the child developed a complication or developed an illness following the child’s birth.

The NES now allows parents in these circumstances to agree with their employer to effectively put their unpaid parental leave ‘on hold’ while their baby is in hospital and return to work during that time. They can then resume their leave when the baby goes home.

Should you have any queries relating to the subject of this article, please get in touch with Gadens’ Employment Advisory Team.

Authored by:

Steven Troeth, Partner
Claire Duggan, Associate
Sera Park, Associate

References:  Fair Work Amendment (Improving Unpaid Parental Leave for Parents of Stillborn Babies and Other Measures) Act 2020; Explanatory Memorandum.