Government proposes more flexibility for Paid Parental Leave scheme

UPDATE: The proposed changes to the Paid Parental Leave Scheme discussed in this article have subsequently been passed by Parliament with the Paid Parental Leave Amendment (Flexibility Measures) Act 2020 coming into force from 1 July 2020.

Earlier in February, the Government introduced the Paid Parental Leave Amendment (Flexibility Measures) Bill to Parliament which proposes to allow for more flexibility around the taking of Government-funded paid parental leave.

If passed, the proposed legislation will apply to parents of children born or adopted from 1 July this year and provide for the existing 18-week entitlement to be accessed as an initial “non-flexible” period of up to 12 weeks (to be taken within the 12 months following the birth or adoption of the child) with the remaining “flexible” period of up to six weeks able to be taken any time after the initial period, as long as it is used within two years of the birth or adoption of the child.

The initial non-flexible 12-week period will be accessed in the same manner as the current 18-week entitlement but the flexible period of up to six weeks (30 days) may be utilized in a block period or as individual days, as long as it is accessed by the time the child turns two. In certain circumstances, the flexible period may also be accessed by a secondary claimant, providing the primary claimant has authorized the arrangement.

The Bill’s Explanatory Memorandum gives the example of same-sex couple, Evelyn and Jane, who conceive a child with the help of their close friend, Tom, who donates sperm. Evelyn, as the birth mother, accesses the 12-week non-flexible period of paid parental leave and makes a claim for a further 10 days flexible paid parental leave immediately following the initial period. Evelyn then gives permission for a secondary claim to be made in respect of the 20 remaining flexible paid parental leave days. Both Jane and Tom may make a claim for flexible paid parental leave days in respect of the child; Jane as the partner of primary claimant, Evelyn, and Tom as the birth father of the child.

The primary claimant will be required to specify how many days a secondary claimant is entitled to claim but it will not be necessary to specify who the secondary complainant is. The Explanatory Memorandum indicates that this accounts for “complex and blended family arrangements and the possibility that there could be more than one secondary claimant in relation to the child”.

Where the primary claimant seeks to access their flexible paid parental leave in a single block (of up to six weeks), the employer will continue to be responsible for administering the paid parental leave payments. The Government will assume this responsibility where the primary claimant seeks to access their flexible paid parental leave in separate periods (of up to 30 days).

Whilst the Explanatory Memorandum notes that many eligible employees will simply elect to access their six-week flexible paid parental leave period in a single block immediately following their non-flexible 12-week period, it also acknowledges some parents will prefer to utilise the flexible paid parental leave period “to facilitate a gradual return to work”.

The Explanatory Memorandum provides the example of Jane who works five days per week before taking parental leave to have a child. Jane accesses her initial non-flexible block period of 12 weeks paid parental leave then returns to work, entering into an agreement with her employer to work only three days per week whilst applying to be paid her 30-days flexible paid parental leave on the two days per week that she is not working (until the benefit is exhausted).

The Explanatory Memorandum claims the proposed new system will allow parents “to balance parental responsibilities with returning to work” whilst the Minister for Population, Cities and Urban Infrastructure, Alan Tudge, added that  the changes will be particularly beneficial for women who are self-employed and small business owners who cannot afford to leave their business for 18 consecutive weeks.

In a media release earlier this month, Industrial Relations Minister, Christian Porter, also flagged the Government’s desire to amend the National Employment Standards (NES) in reference to unpaid parental leave, to help support families dealing with traumatic situations such as stillbirths, infant deaths and premature births. The Morrison Government proposes to increase the entitlement for those who’ve experienced a stillbirth or infant death to a maximum of 12 months unpaid leave. While not all parents will seek to access 12 months unpaid leave in such a situation, Mr Porter noted it was “important that the option is available to them should they need it”.

Furthermore, for parents of premature babies, or babies that experience birth-related complications that result in immediate hospitalization, the Government will seek to remove the barrier that currently prevents parents from going back to work and restarting their leave when their baby is ready to go home.

The legislation to enact the proposed changes to unpaid parental leave is expected to be introduced to Parliament in the autumn sitting period.