Federal Parliament recently introduced significant changes to the way parental leave works for most employees, through:

• the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Rules 2023, which amends the Government's paid parental leave scheme; and
• the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023, which amends the unpaid parental leave scheme.

These changes to parental leave represent a significant step towards the government's stated policy goal of shifting the work-family balance and fostering family support for employees.

‍Government paid parental leave

Previously, under the Paid Parental Leave Act 2010 (Cth), birth parents (as 'primary carers') were eligible to receive a total of 18 weeks' government-funded paid parental leave (PPL). The parent who did not give birth ('secondary carer') was eligible to receive up to two weeks of Dad and Partner Pay (DAPP).

Under the new scheme, effective from 1 July 2023:

• the existing entitlement to 18 weeks' PPL pay has been combined with the two weeks' DAPP entitlement to create a single PPL scheme accessible to both parents. This has the effect of removing the notion of 'primary' and 'secondary' carers altogether;
• a greater number of employees are able to access this PPL scheme in comparison with its predecessor, because the eligibility criteria have been expanded by introducing a family income test of $350,000. The previous eligibility test included a $168,865 individual income test;
• eligible working parents are now able to share up to 20 weeks of payments, within two years of the child's birth or adoption. Importantly, the 20 weeks of leave can be taken flexibly, removing the requirement to take a 12-week block. However, each partner is required to take at least two weeks (with some exceptions – e.g. for single parents); and
• the requirement to return to work after the leave (in order to be eligible for the entitlement) has been removed.

Unpaid parental leave

All employees (including casuals), who have completed at least 12 months of service are entitled to unpaid parental leave under the National Employment Standards (NES).

The recent amendments have created new flexibility as to how unpaid leave is taken. These changes also came into effect from 1 July 2023, and include:

• greater flexibility as to eligibility for leave for a parent who takes leave after another person has previously taken leave to care for the same child (generally, this will be the non-birthing parent). For that employee, they must have completed 12 months' service by the date on which their leave is to commence;
• parents can now take 12 months' unpaid parental leave at any time in the 24 months following the birth or placement of their child;
• both parents can now request an extension of up to 12 months beyond their initial 12-month unpaid leave entitlement;
• the amount of flexible unpaid parental leave days an employee can take has increased from 30 days to 100 days. This unpaid leave can be taken as a continuous block, flexibly or a combination of both during the 24-month period after the birth, or placement of their child. This means that employees can now take flexible unpaid parental leave before, as well as after, any period of continuous unpaid parental leave; and
• the concept of limited 'concurrent leave' has been removed. Both parents may now take unpaid parental leave at the same time, in order to promote shared caring responsibilities between parents.

What does this mean for employers?

Employers should review their parental leave policies to ensure they are up to date with the changes, and reflect correct entitlements.

With a number of employers relying on the concept of 'primary' and 'secondary' carers to determine their own paid parental leave policies and schemes, the removal of these concepts creates new questions around how employers should fairly manage employees who are choosing less traditional family arrangements.

For further assistance, please contact our Employment, Workplace Relations and Safety team.

Authors

Jacquie Seemann | Partner | +61 2 9020 5757 | jseemann@tglaw.com.au

Elodie Bethuel | Associate | +612 9020 5617 | ebetheul@tglaw.com.au

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