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Parental Leave Entitlements: the cost of getting it wrong and how not to

Shanni Zoeller

Throughout the life of your business, you will have employees take parental leave. It is important to know what their parental leave entitlements are, so you can ensure appropriate arrangements are made to accommodate both the business and the employee in the lead up to, during, and after, parental leave.

The entitlements

Permanent employees are entitled to 12 months of unpaid parental leave if they:

  1. have worked for the employer for at least 12 months:
    1. before the date or expected date of birth of the child;
    2. before the date or expected date of adoption; or,
    3. when they take the leave (for example, mother takes maternity leave for 12 months and father takes parental leave immediately after for 12 months); and,
  2. have or will have primary responsibility for the care of the child.

Casual employees are also entitled to 12 months of unpaid parental leave if they:

Unpaid parental leave is to be taken in one continuous period.

Employees can also extend their parental leave up to 24 months by mutual agreement, however only one extension can be requested.

Unpaid parental leave can run concurrently with the 18-week government-paid parental leave scheme (if an employee satisfies the eligibility criteria). Employees must apply to Centrelink directly. If an employee is entitled to paid parental leave, Centrelink will generally deposit the funds into your account, for you to distribute to the employee.

Notice and evidence requirements

Before an employee takes parental leave, they must notify you of the start and finish date of the leave. You may also request evidence (for example, a medical certificate) to substantiate the claim for parental leave.

Employees intending to take parental leave must advise you at least 10 weeks before the date of birth or date of adoption. These dates must be confirmed with you 4 weeks before starting the leave. Notification of the intention to take leave should be done through your usual leave application process: for example, completing a leave form or submitting a request through a HR portal.

Replacement Employees

Being notified of the employee’s intentions to take parental leave and how long the leave will be is critical for your business. This will ensure you can make internal re-arrangements to manage the absence or have enough time to find a suitable replacement to cover the employee for the parental leave period. When you employ a replacement, you must advise the person that:

A way to ensure that there is no ambiguity about the temporary nature of their role is to capture the arrangement in a fixed term “maternity relief” employment contract.

Please note that if an employee wants to return from parental leave earlier than expected, they can do so, if the employer agrees. If an employer does not agree, the employee will return on the planned date.

Parental Leave Protections

Once an employee invokes their right to take parental leave, they have additional protections under the Fair Work Act:

  1. Return to Work Guarantee: Where an employee goes on parental leave, they are entitled to:
  1. Consultation on workplace change: Where, during the parental leave period, the position changes significantly or no longer exists, an employer must consult with the employee to ensure that they are kept informed of the changes impacting his or her role.

The following additional obligations apply to pregnant employees:

  1. Unpaid special maternity leave: This type of leave can be taken when the employee has a pregnancy-related illness or where the pregnancy ends after 12 weeks because of a miscarriage, termination or still-birth. The leave will end when the pregnancy or illness ends.
  1. Transfer to a safe job: Where an employee is unable to perform her usual position because of illness or risks arising out of pregnancy, or hazards connected to that position, she may be transferred to a “safe job”. If this occurs, the employee’s hours of work, pay and other entitlements remain unchanged. This can be on a temporary basis, or until maternity leave is taken.
  1. “No safe job” leave:  Where a pregnant employee cannot be transferred to a “safe job”, she may be entitled to be paid “no safe job” leave, until she is ready to go on maternity leave. “No safe job” leave will be paid at the employee’s base rate of pay.

If you are an employer, it is important that you know and understand your obligations regarding parental leave. Failure to comply could expose you to discrimination or adverse action claims.

A case which illuminates what an employer should not do when an employee announces that she is pregnant is Leutton v Imperial Tavern [2019].

Ms Leutton was a bottle shop attendant who had been employed by Imperial Tavern for more than 2 years. As soon as Ms Leutton found out that she was expecting, she informed her two managers. The managers requested that she go and see a doctor, after which they would consider her position and whether any modifications to her job were needed.

During the time between Ms Leutton announcing her pregnancy and attending her doctor’s appointment, she saw a job advertisement for a bar attendant position posted on the Imperial Tavern’s Facebook page.

Ms Leutton’s doctor advised that she was restricted to lifting no more than 5 kgs, while the rest of her shop attendant duties could remain unchanged. Despite the lifting restrictions which were listed on the medical certificate, Ms Leutton advised that she wanted to work for as long as possible up to the birth. One of the managers expressed some dissatisfaction about the lifting restriction, commenting “I cannot tell you not to unload the van, as that is not fair on me, as I have enough to do.”

Ms Leutton, her partner and Imperial Tavern’s two managers met again to discuss the medical certificate. During the meeting, one of the managers asked Ms Leutton what she wanted to do. She said that she could be transferred to a “safe job”. The manager stated that this was not something that the business did. Ms Leutton then asked whether she would have a job after she got back from maternity leave. The manager replied, “we will see if there is a job available”. Knowing that there was a bar attendant job being advertised, Ms Leutton suggested that she could work in this role as she had her RSA. The manager declined, saying it “was a bad look for a pregnant woman to work behind a bar”. Her employment was then terminated.

Ms Leutton made an adverse action claim against Imperial Tavern on grounds that she had exercised, or proposed to exercise, a workplace right, being the right to:

1. unpaid, “no safe job” leave; and/or,

2. be transferred to a safe job during the risk period.

The court ruled that there was absolutely no doubt that her employment had been terminated because she was pregnant. The reason provided on the separation certificate stated:

“Due to pregnancy, Angela is unable to continue to work in her position as a bottle shop attendant.”

Ms Leutton was awarded approximately $40,000 in compensation for lost wages (for the 5.5 months she would have worked before going on maternity leave) and for hurt and humiliation. The Court also imposed fines of $10,000 on the Imperial Tavern itself, as well as the managers who were involved in the contraventions, which were paid to Ms Leutton.

Lessons for Employers

Taking adverse action or terminating an employee because they are pregnant or denying them their rights under law cannot only constitute a breach of the general protection provisions in the Fair Work Act but a breach of anti-discrimination legislation.

If a business is found to be in breach the court cannot only award damages for hurt and humiliation and compensation for the loss suffered but can impose penalties on the business itself and those individual managers who participated in the contraventions.

If you need advice regarding parental leave entitlements or your obligations as an employer, please do not hesitate to contact a member of Coleman Greig’s Employment Law team.