Paid parental leave — draft legislation released


Paid parental leave — draft legislation released

The Federal Government has released the draft legislation of Australia's first paid parental leave scheme.


Get unlimited access to all of our content.

The Federal Government has released the draft legislation of Australia's first paid parental leave scheme.
The Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, said that this is an important milestone for Australian families who have been waiting decades for a national paid parental leave scheme.
This major reform will provide up to 18 weeks of government-funded parental leave pay at the National Minimum Wage (currently $543.78 per week) for eligible parents of children born or adopted on or after 1 January 2011.
Under the Government's scheme, casual and part-time workers, contractors, and the self-employed will be eligible for paid parental leave, many for the first time.
To help employers prepare for the scheme, the role of employers in providing government-funded parental leave pay will be phased in over the first six months of the new scheme, to align with the new financial year.
The Government will establish an implementation group to help finalise the details of Australia’s first national paid parental leave scheme.
Organisations involved
The following organisations have been invited to join the implementation group:
  • Australian Chamber of Commerce and Industry
  • Business Council of Australia
  • Australian Industry Group
  • Australian Mines and Metals Association
  • Council of Small Business Organisations of Australia
  • National Foundation for Australian Women
  • Australian Council of Trade Unions
  • Unions NSW
  • Shop, Distributive and Allied Employees Association
  • UnitingCare
  • Federal Sex Discrimination Commissioner
  • Woolworths
  • National Australia Bank.
The group will also include representatives from the Department of Families, Housing, Community Services and Indigenous Affairs, the Department of Education, Employment and Workplace Relations, and Centrelink.
The Bill
The draft Paid Parental Leave Bill is now with the Senate Community Affairs Legislation Committee for inquiry to report by 3 June 2010. The Bill will be formally introduced into the House of Representatives next week.
The Government’s scheme is based closely on the expert recommendations of the Productivity Commission and is in Australia’s best economic interests.
Under the scheme, leave can be taken in addition to existing employer-funded entitlements either at the same time or consecutively.
Further details from the draft Paid Parental Leave legislation
A range of new implementation details will support employers to successfully provide paid parental leave:
  • From 1 January to 30 June 2011, employers can choose to provide parental leave pay to their eligible employees. This will become a requirement for employers from 1 July 2011 for eligible employees with more than 12 months continuous service. This will align with the beginning of the new financial year when payroll and other computer systems are upgraded, and responds to feedback from our consultations. In all other cases parents will be paid by the Family Assistance Office (FAO). 
  • Employers can choose to receive advances of funds from the Government in as few as three instalments. Employers will only be required to pay an employee when they have received sufficient funds. 
  • The FAO will be responsible for paying eligible employees who take less than eight weeks of paid parental leave: for example, where an eligible father takes the remainder of a mother’s Government-funded leave after more than ten weeks. 
  • Employers will provide parental leave pay on a ‘business as usual’ basis — they won’t be required to lodge regular reports with the FAO or establish special bank accounts. Parental leave pay will be paid in accordance with an employer’s normal pay practices and the employee’s usual pay cycle. 
  • Employers will only pay employees who intend to return to work. Women who resign, but meet the work test, will be paid by the FAO.
Additional points to note are:
  • Parents who are no longer employed at the birth of their child, but have satisfied the work test, will still be eligible for paid parental leave. They will be paid directly by the FAO. For example, if a mother who is a contract worker meets the work test but her contract finishes a month before the baby is born, she will still receive parental leave pay (from the FAO).
  • The paid parental leave work test has been modified to better suit the circumstances of casual, seasonal and contract workers. A person can have a break of up to eight weeks between working days and still be regarded as having worked continuously. They will still need to have worked 330 hours for at least 10 of the 13 months prior to the birth or adoption of their child.
  • People receiving parental leave pay can stay connected to their workplace through ‘keeping in touch’ provisions. These provisions allow the parent to participate in activities at their workplace for up to 10 days during the period of paid parental leave, while remaining eligible for parental leave pay.
These new implementation details respond to feedback received during the consultations and complement the core elements of the paid parental leave scheme announced by the Australian Government in the 2009–10 Budget.
The Government’s paid parental leave scheme, as further detailed today in the exposure draft Paid Parental Leave Bill, is a sensible approach to an issue which has remained unresolved for too long, Australian Industry Group chief executive, Heather Ridout, said.
A taxpayer-funded scheme providing payments to working mothers of 18 weeks at the level of the minimum wage, is consistent with the recommendations of the Productivity Commission and is largely consistent with Ai Group’s proposals.
The introduction of an appropriately designed paid parental leave scheme will provide many benefits to the community, not least of which is increased participation by women in the workforce, Ridout noted.
ACTU president, Sharan Burrow, called on Opposition leader Tony Abbott not to block the bill, and urged business lobby groups to support the scheme of 18 weeks universal taxpayer-funded leave.
The Australian Chamber of Commerce and Industry welcomed the release by the Government of exposure draft Paid Parental Leave Bill, but expressed caution at the unnecessary level of administrative compliance that could be imposed on employers and small business.
The Government scheme is measured, publicly funded, and consistent with what is affordable and necessary for an economy-wide scheme of this nature. Coupled with the significant levels of maternity and paternity leave provided by Australian employers and the additional social support through the family tax system and baby bonus it compares more than well with international standards, ACCI concluded.
The draft legislation can be viewed here.
Post details