‘Parental Leave’ is a collective term used to cover ‘Unpaid’ and ‘Paid’ Parental Leave. As Unpaid Parental Leave and Parental Leave Pay are covered by separate sets of laws with different obligations, definitions and eligibility criteria, it is important that businesses have a good comprehension of both in order to comply with their requirements.
Unpaid Parental Leave has been a long standing feature of the workplace relations and award systems and is currently provided by the National Employment Standards of the Federal Fair Work Act 2009 for employers in the Federal workplace relations system.
Australia’s first national Paid Parental Leave Scheme commenced on 1 January 2011, providing financial assistance in the form of Parental Leave Pay to parents providing care to their newborns or recently adopted children, under the Paid Parental Leave Act 2010.
As of 1 July 2011, employers under the Federal Fair Work Act 2009, are required to forward Parental Leave Pay Government-funding to eligible employees and keep the required records.
It is important to understand the difference, as well as the interaction, between Unpaid Parental Leave under the National Employment Standards of the Federal Fair Work Act 2009 and the entitlement to Parental Leave Pay under the Paid Parental Leave Act 2010.
Under the Federal Fair Work Act 2009, employees are entitled to be absent from work in relation to the birth or adoption of a child and return to the same position at the completion of their leave.
On the other hand, the Paid Parental Leave Act 2010 does not provide for paid leave, but financial support in the form of Parental Leave Pay to persons who are not working due to the birth or adoption of a child. This means that Parental Leave Pay may be provided regardless of whether a person is currently taking Unpaid Parental Leave or has resigned from their employment.
Therefore, there may be cases where a person is not entitled to Unpaid Parental Leave and has elected to resign their employment but is qualified for Parental Leave Pay.
In summary, Unpaid Parental Leave, under the National Employment Standards, is an employee entitlement provided only to eligible employees. Parental Leave Pay, on the other hand, is a social security entitlement payable to persons regardless of whether they currently hold employment or not.
To assist businesses in understanding and complying with their Parental Leave requirements, Business SA has produced the Parental Leave Booklet which provides an overview of the Paid Parental Leave Scheme and the entitlement to Unpaid Parental Leave, along with practical guidance, examples and explanations of relevant obligations of employers and employees in relation to Parental Leave. Additionally, this Booklet includes pro forma letters, forms and checklists, as well as a collection of frequently asked questions relating to Parental Leave.
The Parental Leave Booklet is structured into two main parts, with each part covering the key aspects of the relevant legislation. One part covers Unpaid Parental Leave which incorporates the entitlements under the National Employment Standards of the Federal Fair Work Act 2009. This part is only relevant for National System Employers covered by the Federal Fair Work Act 2009, which is all private sector employers.
The other part covers Government-funded Paid Parental Leave under the Paid Parental Leave Act 2010. This part covers all employers, regardless of whether they are National System Employers or not.
For details about this new Booklet, visit www.business-sa.com/publications Alternatively, contact the Business Advisory Centre on 08 8300 0113.