Becoming a parent is quite obviously a wonderful and exciting thing, however, amidst the excitement is the reality that many mundane, yet important, considerations need to be made such as applying for parental leave and parental leave entitlements. For Australian workers, the parental leave entitlements for the most part generally fall under the auspices of two Acts: the Fair Work Act (the FWA) and the Paid Parental Leave Act (the PPL). And because there are two Acts that have parental leave provisions, also means that there are two separate eligibility requirements that need to be considered as well.
Most working Australians will be covered by the FWA – unless they are eligible for State parental leave entitlements – and will be entitled to unpaid parental leave under the provisions of the Act.
Therefore, the majority of workers who are already allowed unpaid parental leave, will also generally speaking be entitled to parental leave pay under the PPL. However, readers should note that there are some instances where eligibility may not be met, such as a person meeting the eligibility requirements of parental leave payment, but won’t be able to take unpaid leave due to the fact that they have not worked in the place of employment for the minimum amount of time. Alternatively, a person who earns above the s 41(a) PPL limit of $150,000 for the adjustable taxable income for the relevant financial year, may not be eligible for parental leave pay because they earn too much money.
Unfortunately for efficacy not all of the sections associated with both Acts will be covered, and it’s advisable that if you do have any inquiries regarding parental leave to direct them to a legal practitioner who will be able to assist.
What are the general eligibility requirements for unpaid parental leave under the Fair Work Act?
In order for a person to meet the eligibility requirements for unpaid parental leave, they must meet the Division 5 of Part 2-2 of the FWA Act requirements which are as follows:
- they are an employee;
- the leave requested must be associated with either a birth or adoption of a child (s 70(a));
- the person who is requesting leave must or will have a responsibility in caring for the child (s 70(b));
- the person has been employed with the same employer on a continuous basis for at least 12 months (s 67); and
- if the person is a casual employee, they must be a long term employee who has a reasonable expectation of continuing employment on a regular and systematic basis (s 67(2)).
Who is an ‘employee’ under the Fair Work Act?
A person who is considered as an ‘employee’ under the FWA is not explicitly defined, so some guidance may be sought via the common law which states that an employee can only be a person who provides labour for a wage. Therefore, people who undertake unpaid volunteer work for example, may not be considered as an employee under the FWA.
In instances where an ‘employee’ may be harder to define – such as drawing a distinction between an employee who is performing work as part of a business or organisation, and that of an independent contractor , and if such a situation does arise, the court or tribunal will look towards the facts of the case when deciding whether or not the person is an employee or independent contractor.
There is no specific test which can be applied when a court or tribunal is deciding one way or another, but rather, they’ll look towards certain ‘indicia’ which may determine the status of the worker.
Generally speaking the indicia that a person is an employee are:
- the employer exercises substantial control in regards to the work to be performed;
- the employee is integrated within the business or organisation;
- the worker may wear a uniform or display some sort of indication that they are associated with the business or organisation;
- tax deductions are made from the pay of the employee;
- the employee is entitled to sick or paid holiday leave,
Again we should re-emphasise, that ultimately, the courts or tribunal when making a determination will look at all the facts of a case which may not always fit neatly in regards to the indicia.
When is a casual employee entitled to unpaid leave under the Fair Work Act?
Much like the term ‘employee’, a ‘casual’ employee is also not clearly defined under the FWA but for the most part, a casual employee is a person who is employed on an irregular, uncertain or temporary basis.
However, with that being said, the FWA does make an allowance for a casual employee to receive unpaid parental leave under s 67 if:
- the employee is, or will be a long term casual employee of the employer immediately before the birth, expected birth of the child, or if the leave is adoption related, it is on the day of placement or the expected day of placement;
And a further requirement under s 12 of the FWA states:
- the employee must have been employed by the business or organisation on a regular and systematic basis during a period of at least 12 months.
What does it mean that a casual employee has been employed on a ‘regular and systematic basis’ under the Fair Work Act?
A casual employee who has been employed on a ‘regular and systematic basis’ is not defined under the FWA, so again, seeking guidance from the common law, a casual employee may be regarded as having worked on a ‘regular and systematic basis’ if there is a clear indication of a pattern of hours rostered and evidence which points to regular employment with the business or organisation on a systematic basis.
What are the general eligibility requirements for parental leave pay under the Paid Parental Leave Act?
Section 31 of the PPL sets out the eligibility requirements for parental leave pay and is as follows:
- the person satisfies the work test;
- the person satisfies the income test;
- the person satisfies the Australian residency test;
- the person is the primary carer for the child;
- the person has not returned to work;
- either the person or their partner has no entitlement to the baby bonus for the child;
- a person is not entitled to the baby bonus, nor has a partner or former partner of the person who is, or was, entitled to the baby bonus in relation to the child.
Further special eligibility requirements for parental leave pay under the PPL are also applicable for if a child is stillborn, dies, and where the birth mother may be eligible for parental leave pay even if they do not satisfy the working test under s 31(3).
Additionally, a person who is adopting for the most part, has to meet the same eligibility requirements for parental leave pay under s 31(1) of the PPL.
Who can make a claim for parental leave pay under the Paid Parental Leave Act?
Under s 53 of the PPL, there are three types of claims that can be made: primary; secondary; and tertiary.
Primary claim: when making a primary claim: only the birth mother of the child; an adoptive parent of the child; and any person who satisfies the prescribed PPL Rules as being exceptional in circumstance, will a primary claim be satisfied.
Alternatively, circumstances which are set out in the PPL Rules that allow for a person to be eligible for parental leave pay, even when they are not the primary carer of the child are as follows:
- the person is temporarily unable to care for the child due to circumstances beyond their control, such as sickness (rule 2.3);
- a situation has arisen where a person has lost care for the child due to the occurrence of an event without the person’s consent, preventing the person from becoming a carer, such as a custody dispute (rule 2.4);
- the mother continues to be eligible for parental leave pay despite not being the primary carer of the child in instances where the child is given up within 18 weeks of birth in accordance to rule 2.6.
Secondary claim: when making a secondary claim: only the partner of a primary claimant; parent of the child; the person is not the primary claimant; or a person who satisfies the prescribed PPL Rules as being exceptional in circumstance, will a secondary claim be satisfied.
The exceptional circumstances which are set out in Division 2.4.1.2 of Part 2-4 of the PPL Rules and are as follows:
- the person has, or is likely to have continuous care of the child for at least 26 weeks;
- the person did not become the carer due to a decision made by a State or Territory child protection agency.
Additionally, an exceptional circumstance may also be applicable under the following instances:
- the person is a partner of the primary claimant and there is a likelihood that the primary claimant is incapable for caring for the child for at least 26 weeks; or
- there is a likelihood that the primary claimant and their partner will be incapable for caring for the child for at least 26 weeks, and the person has become the carer; or
- if there is an extreme family breakdown or risk to the physical or mental wellbeing of a child due to violence, neglect or sexual abuse, and that it is unreasonable for a primary or secondary claimant to have care of the child, and it is in the child’s best interest that the person to have care for them, and therefore, is now the primary carer.
Tertiary claim: a tertiary claim can only be done in instances when a valid secondary claim has been made, as stated in s 17 of the PPL. However, Division 2.4.1.3 of Part 2-4 of the PPL Rules does set out the exceptional circumstances in which a tertiary claim is made, namely:
- the person has, or is likely to have continuous care of the child for at least 26 weeks;
- the person did not become the carer due to a decision made by a State or Territory child protection agency.
Additionally, an exceptional circumstance may also be applicable under the following instances:
- previously, the person had been the primary claimant and the secondary claimant had care of the child in exceptional circumstances, which is no longer applicable; or
- previously, the person had been the primary claimant and there is a likelihood that the secondary claimant is incapable of caring for the child for at least 26 weeks; or
- there is a likelihood that a primary or secondary claimant is incapable of caring for the child for at least 26 weeks, therefore, the person has become a primary carer; or
- if there is an extreme family breakdown or risk to the physical or mental wellbeing of a child due to violence, neglect or sexual abuse, and that it is unreasonable for a primary or secondary claimant to have care of the child, and it is in the child’s best interest that the person to have care for them, and therefore, is now the primary carer.
Which workers are eligible for parental leave pay under the Paid Parental Leave Act?
Under s 35 of the PPL, the only requirement for a person to be eligible for parental leave pay, is that they are engaged in ‘paid work’, such as working for a business or organisation for remuneration or an equivalent financial benefit. Otherwise, a person who is self-employed may also be eligible if they are carrying out a business for profit.
However, it should be noted that similar to the FWA, a person is not considered to be undertaking paid work if they are a volunteer or engaged in a work for an honorarium, gratuity or a similar type payment system for work.
This piece is only a broad overview of parental leave laws. If you have any concerns in regards to the eligibility requirements, please seek the help of a legal practitioner who will be able to help with any concerns.
