What is Unpaid Parental Leave?

Unpaid parental leave is an important area of employment law that is regularly overlooked by employers. We often find that employers have not turned their minds to the management of unpaid parental leave, until it is too late and a workplace dispute has arisen.

This article aims to bring all employers up to speed on the essential ‘must knows’ of unpaid parental leave.

Let’s start at the beginning

The National Employment Standards (NES), which apply to all employees in Australia, establish the minimum unpaid parental leave entitlements.

In short, all employees are eligible for unpaid parental leave, as long as they have completed at least 12 months of continuous service with their employer.[1]

The entitlement itself constitutes 12 months of unpaid leave, as long as the leave is associated with the birth of a child of the employee (or the employee’s spouse), or the placement of a child under 16 years of age with the employee for adoption. [2]

On-going consultation

Employers have an on-going obligation to consult with their employee, particularly when it comes to issues relating to the employee’s pre-parental leave position and their return to work.

This obligation requires the employer to be proactive and engage with the employee regularly to discuss possible changes to the workplace and how such changes may affect the employee’s role.

An employer will not satisfy the obligation to consult by simply informing an employee of a workplace related decision or change. Rather, it requires an ongoing and persistent dialogue between the employer and employee, so as to allow the employee an opportunity to consider and voice their concerns regarding changes in the workplace, before they are implemented.

Can an employee work while on unpaid parental leave?

It is common for an employer to require an employee to perform some work while they are on unpaid parental leave.

Should this be the case, the employer can request a ‘keeping in touch’ day, which allows the employee to perform some work while they are on leave.[3]

Employers must take care when requesting a ‘keeping in touch’ day. For example, an employee can only work up to ten ‘keeping in touch’ days over any 12 month period, all of which must be paid as an ordinary day of work.

In addition, an employer cannot request a ‘keeping in touch’ day within 42 days of the date of birth or placement of a child. [4] However, an employee can request a ‘keeping in touch’ day, as long as 14 days have elapsed since the date of birth or placement of a child. [5]

Most importantly, employers need to be aware that even though they can request an employee perform a ‘keeping in touch’ day, the employee must ultimately consent (such consent cannot be unreasonably withheld). [6]

Can an employee request more than 12 months’ leave?

An employee who has competed 12 months of unpaid parental leave may request an additional 12 months of leave.[7] Such a request must be made in writing.[8] The employer must respond, in writing, within 21 days of receiving such a request.[9]

While an employer can refuse an employee’s request for additional leave, the refusal must be based on reasonable business grounds only.[10] In addition, prior to refusing such a request, the employer must consult with the employee and allow them an opportunity to discuss the request.[11]

What happens on the employee’s return to work?

An employee who has been on unpaid parental leave has an entitlement to return to the same role that they had prior to taking leave. This is referred to as the ‘return to work guarantee’.[12]

The ‘return to work guarantee’ regularly causes mix-ups and confusion amongst employers, particularly when the employee’s position no longer exists, or another employee has been placed in that role.

Pursuant to the consultation obligation, an employer should have already consulted with the employee on workplace changes that may affect the employee’s role. Should the employee’s role no longer exist, but the employee is able and qualified to perform another vacant role, then the employee is entitled to be placed in that role. In the event there are two vacant roles, the employee will be entitled to the role which is closest in status and pay to their pre-parental leave role.

Should there be no available roles at all, then the employee’s employment will come to an end by way of redundancy. Even though an employer can make an employee’s role redundant while that employee is on unpaid parental leave, the employer must still comply with the redundancy provisions of the Fair Work Act 2009 (Cth).[13]

Finally, the fact that the employee is on unpaid parental leave at the time their role is made redundant cannot influence the employer’s decision to make the role redundant.

What about the employee who filled in the role?

When hiring or transferring an employee to fill in for another employee who is on unpaid parental leave, the employer must tell the replacement employee that their engagement/transfer is temporary and that the employee who is on unpaid parental leave is entitled to have their role back when they return to the workplace.[14]

Importantly (and regularly overlooked), an employer must tell the replacement employee that the employee’s unpaid parental leave may end early, should something unexpected happen to the child, or should the employee cease having responsibility for the care of the child.

This is merely a snapshot of the various laws that regulate unpaid parental leave. As an employer, it is critically important that you obtain professional advice when it comes to managing employees who are considering taking unpaid parental leave, or are returning to the workplace.

How can DSA Law help?

If you have a employment law issue and believe you could benefit expert legal assistance, please Contact Us or one of our Employment Lawyers at DSA Law on (03) 8595 9580.

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[1] Fair Work Act 2009 (Cth), s 67.

[2] Ibid s 70.

[3] Ibid s 79A.

[4] Ibid s 79A(2)(c)(ii).

[5] Ibid s 79A(2)(c)(i).

[6] Ibid s 79A(2)(b).

[7] Ibid s 76(1).

[8] Ibid s 76(2).

[9] Ibid s 76(3).

[10] Ibid s 76(4).

[11] Ibid s 76(5A).

[12] Ibid s 84.

[13] Ibid s 119.

[14] Ibid s 84A.