Understanding parental leave entitlements

Parental leave (sometimes referred to as maternity or paternity leave) is an entitlement that will be accessed by a significant number of Australians throughout their working lives.

However, it is also one of the more complex parts of the Fair Work Act 2009 (Fair Work Act).

There are potentially three components that make up an employee’s entitlement to take parental leave:

1. the Fair Work Act;
2. social security legislation; and
3. any employment contracts or policies and procedures that provide a higher entitlement.

In this article, we summarise when and how these entitlements operate, and the rights and responsibilities of employers when faced with a request to take parental leave.

When is an employee able to access parental leave?

Parental leave, like any other form of leave under the Fair Work Act, is subject to certain notice and evidence requirements.

Full-time and part-time employees may be entitled to take parental leave if they have obtained at least 12 months’ continuous service as at the date (or expected date) of the birth of the child. Contrary to popular belief, casual employees are also able to access parental leave provided that they:

• have worked on a regular and systematic basis for the past 12 months; and
• would have an expectation of continuing employment on a regular and systematic basis.

If an employee has not obtained the requisite period of service, their employer may at its discretion allow them to access unpaid leave instead.

The same entitlement is also available to spouses or de facto partners, provided that they will be responsible for the care of the child, however special rules apply where they both have the same employer.

What is the entitlement to parental leave?

Under the National Employment Standards, an employee is entitled to 12 months of unpaid parental leave on the birth of the child. This leave must be taken continuously, except in circumstances where the employee accesses ‘flexible’ unpaid parental leave as well (which will be returned to shortly).

In addition, an employee may make a written request to extend the period of leave for an additional 12 months. This request must be made at least 4 weeks before the end of the initial period, and must only be refused on reasonable business grounds.

An employee may take annual leave while on unpaid parental leave, but not personal/carer’s leave (commonly known as sick leave). Taking annual leave also does not have the effect of extending the total period of parental leave.

In some cases, an employee may be entitled to receive Parental Leave Pay for up to 18 weeks from Services Australia. This entitlement is separate and distinct to the entitlement to take unpaid parental leave under the Fair Work Act, and just because an employee may not be eligible to receive paid parental leave, does not mean that they will be unable to take unpaid parental leave. It is common for employers to be asked by Services Australia to pass along this payment to the employee.

As of 1 July 2020, an employee is able to save up to 30 days from their 18 weeks of paid parental leave, and the same amount from their entitlement to take 12 months of unpaid parental leave. This ‘flexible’ amount of leave may be taken any time within 2 years after the birth of the child.

Sometimes an employer will have an enterprise agreement or a policy that creates an additional entitlement to paid parental leave.

How much notice must an employee give to take parental leave?

In most cases, an employee will need to give at least 10 weeks’ notice before starting unpaid parental leave that specifies the intended start and end dates of the leave. If an employee wishes to also access flexible unpaid parental leave, they also must notify the employer of the number of days they wish to save for this purpose, but not necessarily when the days will be taken.

Then, 4 weeks before the intended start date, the employee must either confirm the dates of the leave or advise of any changes. An employer may request reasonable evidence as to the expected date of birth of the child.

A day of ‘flexible’ parental leave may be taken with the provision of 4 weeks’ notice (unless not reasonably practicable) at any time within 2 years after the birth of the child.

Other entitlements

In addition to the above entitlements, the Fair Work Act provides a number of other terms relating to parental leave.

Perhaps the most important is the ‘return to work guarantee’ which creates an obligation to return the employee to their pre-parental leave position, or if that position is no longer available, a position which is similar in pay and status. For this reason, there are special rules when hiring a ‘replacement employee’ to cover the absence, including that they be advised of the rights of the employee on parental leave.

There is a complex interaction between this protection and what happens if the employee’s position is made redundant while on parental leave, including stringent consultation obligations.

If this occurs, it is strongly recommended that employer’s seek independent legal advice on how to manage this process. For this and other advice on parental leave entitlements, contact NRA Legal on 1800 572 679.

By Lindsay Carroll, NRA Legal