Who can use this policy

This policy can be used by all employers throughout Australia, except the following excluded employers:

• Non-constitutional corporation employers in Western Australia
• State public sector employers (i.e. State government agencies, employees of a Minister, the Governor or the Crown); and
• Local Government employers — except Tasmania and Victoria.

Commentary
Background

The following is a brief commentary on some of the aspects of this Parental Leave Policy. However, to ensure that you achieve a policy that meets all of your particular needs, you should obtain specific legal advice. This policy provides you with a framework for developing a parental leave policy. The provisions comply with the Fair Work Act 2009 (Cth) (the 'FW Act').

What is parental leave?
Parental leave includes unpaid parental leave, special unpaid parental leave, birth-related leave, adoption leave, and still birth-related leave, which eligible employees are entitled to take following the birth or adoption of a child (or in the cases of a stillbirth). An eligible employee is entitled to up to 12 months off work (unpaid parental leave), to enable the employee to provide care and support to a child. Importantly, an employee can commence unpaid parental leave at any time in the 24 months following the birth or placement of their child.  Provided the employee is eligible for parental leave and complies with relevant notice and documentation requirements, an employer is required to provide that employee with parental leave.

The 12-month period of unpaid parental leave includes any period(s) of authorised leave (such as annual leave and long service leave). It is important to remember that typically, an employee on unpaid parental leave is not entitled to take paid personal/carer’s leave or compassionate leave (unless permissible in relation to a stillbirth or death of a child).  

Eligibility for parental leave

An employee is entitled to 12 months of unpaid parental leave if the leave is associated with:

• the birth of a child of the employee or the employee’s spouse or de facto partner; or
• the placement of a child with the employee for adoption; and

the employee has or will have a responsibility for the care of the child.

In order to be eligible for parental leave, employees must satisfy certain eligibility criteria, as outlined in the policy.

In summary, an employee will be eligible for parental leave if they have (or will have) completed at least 12 months continuous service with the employer, or if they are a ‘long term eligible casual employee’. The 12 months of service is determined by the following relevant dates:

• for birth-related leave starting before the birth of the child or unpaid special parental leave - the expected date of birth of the child; or
• In any other case – the date on which the employee’s period of leave is to start, which can be anytime within the first 24 months of the child’s birth/adoption.

Long term casual

A ‘long term eligible casual employee’ means a casual employee who has been engaged by the employer on a regular and systematic basis for a period (or periods) of at least 12 months and who, but for the birth or placement of the child, has a reasonable expectation of continuing engagement on a regular and systematic basis.

Employees who are ineligible for parental leave
In circumstances where an employee is not entitled to parental leave and requests such leave due to pregnancy or adoption, you may nevertheless still need to consider the request and seek to agree to a period of other leave (such as accrued annual leave or unpaid leave). That other leave should not be classified as, or called parental leave.

If you refuse to grant other leave to employees who do not qualify for parental leave under the FW Act, this may constitute unlawful discrimination on the basis of sex, pregnancy, or carers’ responsibilities, particularly where the employee is forced to resign because of the refusal. If this situation arises, it is recommended that you seek legal advice prior to refusing the leave request.

Applying for leave
Employees who are eligible to take parental leave must first apply to take parental leave by giving appropriate notice (minimum 10 weeks, or as soon as reasonably practicable in certain circumstances e.g. taking leave prior to the birth of the child) of the leave to their employer. The Request for Parental Leave Form on Workplace can be provided to relevant employees to assist them in meeting relevant notice and documentation requirements.

Extending unpaid parental leave for an additional 12 months

An eligible employee has the option to request an extension of their unpaid parental leave for an additional 12 months beyond their initial entitlement of 12 months unpaid parental leave.

To request this extension, the employee must submit a written request to their employer at least four weeks before the end of their initial 12-month period. It's important to note that this request can only be made while the employee is on a continuous period of unpaid parental leave during the initial 12 months of unpaid parental leave and not during flexible unpaid parental leave. The extended leave period cannot go beyond 24 months from the date of the child's birth or the day of placement.

Flexible Unpaid Parental Leave

Flexible unpaid parental leave allows employees to take up to 110 days (or a higher number if specified by regulation) of their 12 months of unpaid parental leave flexibly. This flexible unpaid parental leave can be taken either as a single continuous period of one or more days or as separate periods of one or more days each. Importantly, an employee can take flexible unpaid parental leave either before or after the single continuous period but cannot take flexible unpaid parental leave during a single continuous period to break it up.

If an employee is pregnant, they can take flexible unpaid parental leave up to six weeks before the expected date of birth. For employees who are not pregnant, they have a 24-month window starting from the date of birth or day of placement of the child to take their flexible unpaid parental leave.

Government-funded Parental Leave Pay

The FW Act does not require employers to provide employees with paid parental leave.

However, some employees who meet relevant work, income, and other eligibility tests may qualify for government-funded Parental Leave Pay (‘PLP’) under the Paid Parental Leave Act 2010 (the ‘PPL Act’).

• From 1 July 2023, The PPL Act will entitle the primary care giver of a child born or adopted on or after 1 January 2011 up to 18 weeks of paid parental leave payments at the national minimum wage.PLP and DAPP will combine into one payment scheme (DAPP will no longer exist as a separate scheme) consisting of a maximum of 100 days (or 20 weeks based on a 5-day work week) at the National Minimum Wage (‘PLP Instalments’) in total between parent couples or for single parents;
• the whole 20 weeks of PLP instalments can be received flexibly in multiple blocks within 24 months of the child’s birth or adoption date (removing the requirement of the 12 weeks of PLP instalments being received in one continuous period and the 30 days’ cap previously mentioned);
• parents will be able to access PLP even when on paid leave (e.g. employer-funded parental leave, annual leave or long service leave), and in between periods of paid work;
• birth mothers or first adoptive parents will have to give approval to share any PLP days, and if shared with a partner, parents will be able to access PLP at the same time;
• for PLP that is shared between a couple, at least 2 weeks will be reserved for each partner to use with any unused amount of PLP days lost if not used within 24 months of the child’s birth or adoption date;
• if a person does not meet the individual income limit of $156,647 (i.e earns more than this amount), there will be a combined family income limit of $350,000 which will be applied instead (this limit will be used whether a person is single or partnered); and
• there will be special circumstance exceptions to the work test for individuals whose ability to work during the ‘work test period’ are impacted by family and domestic violence, a serious medical condition (for either you or an immediate family member you care for), or a natural disaster declared by the Commonwealth or a state or territory.

Paid parental leave under the PPL Act can be taken in conjunction with, or in addition to, employer-provided paid leave, such as annual leave or parental leave. However, no leave entitlements will accrue while an employee is on a period of paid parental leave under the PPL Act

While PLP under the PPL Act will be funded by the Government, employers will generally be required to make the payments to employees from funds provided to them in advance by the Government. This imposes a purely administrative requirement on employers. Employers will not have an obligation to determine whether an employee is eligible for payment under the PPL Act as that decision will be made by Services Australia .

Employers should be aware that despite the introduction of government-funded PLP, they are not permitted under the PPL Act to withdraw an existing entitlement to paid parental leave that has been created through an industrial agreement such as an award or enterprise agreement, or where it appears in a contract of employment.

Keeping in Touch days

An employee on parental leave may return to the workplace and perform work during the period of unpaid parental leave for the purposes of keeping in touch with work. A maximum of ten (10) ‘Keeping in Touch’ days can be utilised during their period of unpaid parental leave.  Employees are entitled to suggest or request ‘Keeping in Touch’ days a fortnight from the birth or placement of their child, but requires employers to wait 42 days before asking employees for such a day.

If an employee works on a ‘Keeping in Touch’ day, that employee is entitled to payment under their relevant contract or industrial instrument, Award or enterprise agreement.

Employer-provided paid parental leave
Other than as required by a relevant award, enterprise agreement, or contract of employment, an employer has no obligation to provide an employee with paid parental leave.

The Parental leave Policy does, however, include an option to provide employees with a paid period of parental leave. You may need to adjust the paid parental leave section of the policy if it does not meet with your requirements. For example, you may wish to impose a minimum period for which the employee is to act as the primary caregiver in order to qualify for paid parental leave. This optional payment provision is intended to be provided in addition to the paid provisions of the PPL Act.

If you include a paid parental leave option, you should be aware that during the period of paid leave, the employee will continue to accrue relevant entitlements related to service. This is a requirement under the FW Act and you cannot contract out of it. However, you may wish to take this into account in determining how much paid parental leave you decide to offer to employees.

Compliance check with industrial instruments
Before implementing your policy, you should check whether there are any awards or agreements applying to the employees who will be affected by the policy, which contain parental leave entitlements. If there are any such awards or agreements in place, you may be required to comply with these awards or agreement provisions. If you are unsure of your obligations, you should obtain specific legal advice.

Limits in the policy
The template policy does not include all of the circumstances when parental leave ends, or can be terminated or cancelled. The majority of these circumstances relate to the death or stillbirth of the child. If you would like to include these provisions, it is recommended that you seek legal advice.

Victorian employers
Employers in Victoria should seek additional advice, as further obligations apply in relation to accommodating parental/carer’s responsibilities. In particular, the Equal Opportunity Act (VIC) contains much wider obligations on employers to accommodate those responsibilities.

Under the Victorian legislation, employers in Victoria must not, in relation to the work arrangements of a contractor, an employee, or a person being offered employment, unreasonably refuse to accommodate the responsibilities which that person has as a parent or carer. The responsibilities as a carer are not merely limited to children who are under school age or children under 18 years old with a disability — they apply generally to any person who is wholly or substantially dependent on the contractor, employee, or prospective employee for ongoing care and attention.

Important note to subscribers

The commentaries and documents in Workplace are updated as necessary, to keep them relevant. You should familiarise yourself with the relevant commentary each time you create a document.

This document has been drafted to suit a wide variety of businesses, with a number of options available to enable you to customise the document to better suit your business. Nevertheless, you may need to make other changes to the document so that it suits the specific needs of your business. If you make additional changes, we cannot guarantee that the changes and modifications you make to the document will be legally compliant or enforceable.

This commentary and any additional information provided to assist you in creating this document, does not constitute legal advice.

If you are unsure about any aspect of this document (including the changes or amendments you make to it), you should seek appropriate advice from a lawyer, skilled in these issues. You may also wish to consider contacting Australian Business Lawyers & Advisors for targeted advice on your business’s specific needs.

You should consult with your financial advisor in relation to any relevant taxation or financial issues concerning the document you create.

After creating this document, you should read through it carefully to make sure it meets your business needs and is consistent with other industrial instruments, policies and procedures which operate in your workplace. This commentary is not designed to be provided to employees or other workplace participants.