• Published
  • 29 October 2015

Parental leave entitlements under the NES

A company whose parental leave policy breached the National Employment Standards by restricting unpaid parental leave to ‘’primary caregivers’’ was ordered by the Federal Circuit Court of Australia to pay nearly $170,000 to a redundant employee who did not take parental leave because of the policy and was therefore disadvantaged when made redundant, as he had not been given access to the ‘’return to work guarantee’’ but had only been offered part-time employment on his return.

Unpaid NES leave not restricted to primary caregiver

The National Employment Standards (under s 70 of the Fair Work Act 2009) provide an entitlement to unpaid parental leave if the leave is associated with the birth of a child of the employee or their partner, or the placement of a child with the employee for adoption, and “the employee has or will have a responsibility for the care of the child”.

To be entitled to leave under s 70, there is no requirement that the employee will be the primary care-giver for the child.  This is in contrast with the scheme that had been in place under the Australian Fair Pay and Conditions Standard as set out in the Workplace Relations Act 1996, which, apart from a short period of concurrent leave at the time of the birth or adoption, made unpaid leave available only to the primary caregiver.

This change was not widely publicised at the time that the FW Act came into effect, and as a result, many employers did not update their internal policies.  It also appears to be the case that since the introduction of the NES a number of enterprise agreements have been approved despite including parental leave provisions that are inconsistent with the NES.  Notwithstanding such approvals, the terms of the NES prevail.

Damages awarded for breach of NES

In the case in question, Scullin v Coffey Products (Australia Pty Ltd) [2015] FCCA 1514, the Applicant asked for unpaid parental leave to assist his pregnant partner who was expecting twins.  When he was told by company management that he was not entitled to leave because the company policy restricted leave to primary caregivers, he instead took a range of other paid leave to assist with care of his newborn children.

While the Applicant was on leave, there was a major downturn in the employer’s business.  The employer only offered him part-time work on his return, and about a year later he was made redundant. His termination pay was calculated on his part-time rate, which led it being about $170,000 less than if it had been calculated on his full-time rate.

The Applicant took action in the Federal Circuit Court.  The Court dismissed his claim that the return to part-time work had constituted unlawful adverse action, as the employer had discharged its onus of showing that the reduction in work hours had not been taken for a prohibited reason.  Other staff, who did not have the status of being a parent or asking for parental leave, also had their hours reduced and/or were made redundant.

The Court, however, found that the employer had breached the NES.  If the Applicant had taken unpaid leave under s 70, he would have been entitled to the Return to Work guarantee under s 84, and therefore the right to return to work full-time, and to have his redundancy payment calculated at his full-time salary.

Implications for polices and enterprise agreements

It is important to note that the NES only governs unpaid parental leave.  Policies and enterprise agreements that provide for paid leave may legally restrict this leave to the primary caregiver.  University policies on parental leave should spell this out, making it clear that unpaid parental leave is not restricted to primary caregivers – even if it is the case that the enterprise agreement wrongly contains such a restriction.  Managers across the University should also be made aware of the situation, especially if the enterprise agreement provision does not comply with the NES.

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