The recently introduced Fair Work Legislation (Protecting Worker Entitlements) Bill 2023 (Cth) (Bill) is the second round of significant changes introduced by the Albanese government to the Fair Work Act 2009 (Cth) (FW Act).
The proposals cover a range of topics, but in this alert we focus on those affecting unpaid parental leave. If passed, these changes will make the entitlement to unpaid parental leave in the FW Act more flexible and promote shared caring responsibilities between parents, requiring employers to review and adjust their existing parental leave arrangements and policies.
Proposed reforms to parental leave under the Fair Work Act
At a high level, the Bill proposes to broaden access to unpaid parental leave provided under the FW Act in the following ways:
- Increasing the amount of flexible unpaid parental leave from 30 days to 100 days (or a higher number of days if prescribed by regulation) to accommodate anticipated increases to the paid parental leave scheme announced in the 2022-2023 Budget.
- Allowing parents to commence unpaid parental leave at any time in the 24 months following the birth or placement of their child.
- Giving pregnant employees the option to take flexible unpaid parental leave from up to 6 weeks before their child’s expected birth date, without requiring permission from their employer.
- Allowing employees to take flexible unpaid parental leave before as well as after a period of continuous unpaid parental leave.
- To promote shared caring responsibilities between parents, removing the concept of “concurrent leave” and allowing employees to take unpaid parental leave at the same time without limitation.
- Removing provisions relating to “employee couples” and allowing all employees to take up to 12 months’ unpaid parental leave and request a further 12 months of unpaid parental leave, regardless of how much leave their spouse or partner takes, up to a total of 24 months each.
- Simplifying the rules about the date at which the employee must have completed 12 months’ service in order to qualify for unpaid parental leave, being the expected birth date of the child (for unpaid special parental leave or birth-related leave commencing before the birth of the child) or the date on which leave is to commence (in any other case).
- Repealing the existing notice requirements and replacing them with a single notice from the employee which includes the start and end dates of continuous unpaid parental leave and the total number of flexible unpaid parental leave days the employee intends to take.
- The replacement of terms such as “he”, “she” and “maternity leave” with gender-neutral terms such as “employee” and “parental leave”.
Timing
This Bill follows reforms recently enacted in the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Act 2023 which passed the Senate on 6 March 2023 and which will come into effect for parents whose children are born or adopted from 1 July 2023. The new Paid Parental Leave Act makes it easier for parents to claim parental leave pay, with either parent able to claim first. The existing maximum 18 weeks’ parental leave pay will be combined with the two weeks’ father and partner pay to provide a single 20-week scheme, to be shared between each parent. Parents will also be able to access the entitlement in multiple blocks, as small as one day, with periods of work in between.
To ensure cohesion with the parental leave pay reforms, if passed, the amendments introduced in the Bill would also apply where the child’s date of birth, or day of placement, is on or after 1 July 2023.
What’s next for parental leave?
The Bill is still in the early parliamentary stages. The House of Representatives referred it to the Senate Education and Employment Legislation Committee, with a report due 28 April 2023. We are tracking the progress of the Bill closely.
Further amendments to the paid parental leave and unpaid parental leave scheme are anticipated, following the Albanese Government’s recent budget announcements.
What other reforms have been introduced?
The Bill also introduces the following proposed reforms:
- Introduction of superannuation obligations into the National Employment Standards; and
- Changes to the circumstances where employees can authorise deductions from wages principally for the benefit of employees.
Increasing protections for migrant workers and amendments to the coal mining long service leave regime are also included in the Bill.
When we view these reforms together with other changes arising from the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) – such as the broadening and strengthening of the flexible work regime and the inclusion of breastfeeding as a protected attribute in the context of workplace discrimination – it’s clear that we are entering a new era in how we regulate the integration of work with employees’ personal and family responsibilities.
At an organisational level, parental leave benefits are key in attracting and retaining talent and in your broader employee value proposition (EVP); often, such benefits enable you to differentiate yourself from your competitors in the labour market. Now is a great time to turn your mind to your organisation’s parental leave policy benefits, assess how they measure up against the proposed changes to the unpaid leave entitlement, and consider how you might want to leverage changes to the statutory regime to elevate your policy offering and your EVP.