What to expect when your employee is expecting
With the commencement of the Prime Minister's parental leave, today is a good time to brush up on your parental leave obligations, including changes in force from 1 July 2018.
'Parental leave' is an umbrella term used to describe four different types of leave available under the Parental Leave and Employment Protection Act 1987:
- Primary carer leave of 18 weeks (22 weeks for those individuals with a due date on/after 1 July 2018 or whose baby is born on/after 1 July 2018, increasing to 26 weeks from 1 July 2020). This can be used by the biological mother or transferred to her spouse/partner if the spouse/partner has permanent primary responsibility for the care of the child.
- Partner leave is unpaid leave for a spouse/partner of the primary carer. This is for one week (if 6 months' service with an employer) or two weeks (if 12 months' service with an employer).
- Extended leave is unpaid leave for the primary carer of the child. This is 26 weeks (if 6 months' service with an employer) or 52 weeks (if 12 months' service with an employer), including any primary carer leave taken.
- Special leave is ten days' unpaid leave prior to the commencement of primary carer leave for pregnancy related reasons (for example, morning sickness, scans, doctor's appointments, etc).
To qualify for leave, an employee must have worked for the same employer for an average of at least 10 hours per week in the 6 months immediately before the baby's expected date of delivery. As set out above, if the employee has 12 months' service, enhanced entitlements are triggered. These time periods can include service with a previous employer if employment has transferred in a sale or restructure situation.
Where an employee does not qualify for primary carer leave (for example, because they have worked for the employer for less than six months), they have the right to request negotiated carer leave. An employer must consider such a request.
All entitlements are also available to individuals adopting a child under six years old.
Employees on primary carer leave receive a government funded payment for the duration of the leave (currently 18 weeks, to increase to 22 weeks from 1 July 2018). This is the greater of the employee's ordinary weekly pay or average weekly income, up to a maximum of $538.55 gross per week. If you provide contractual parental leave payments, consider wording this as a 'top-up' to government payments.
There are a number of notice requirements set out in the Act for both employees and employers. The main notice requirements regarding the taking of primary carer leave are:
- The employee must give written notice of the intention to take parental leave at least 3 months before the expected date of delivery. This must:
- state the proposed date on which the employee wishes to commence parental leave
- state the duration of the leave; and
- be accompanied by a medical certificate certifying the pregnancy and the expected date of delivery.
- After the employer receives an application for parental leave, they have seven days in which to ask for any further information.
- The employer must respond to the leave request within 21 days of receipt.
Obligations during parental leave
There is a presumption in the Act that an employee’s position will be kept open while on parental leave. An employer is able to rebut this presumption by proving that the employee’s position cannot be kept open because it is key to the employer’s enterprise, or because the employee’s position has become redundant. Whether or not a position is a “key” position, will be determined with regard to the size of an employer's enterprise and the training period or skills required in the job.
It is important to bear in mind that an employee's position remains open for their return even if it has been absorbed by other staff members or temporarily covered while the employee is on parental leave.
There are also notice requirements in relation to the return from parental leave. If they have not already done so, an employee must advise the employer whether they are returning from leave 21 days before the leave ends. This must be done in writing.
If the employee is intending to return to work and the employer has been unable to keep the employee's job open, this notice will trigger the "preference period". The "preference period" is a 26 week period during which the employer will give the employee preference over other applicants for any position which is vacant and which is substantially similar to the position held by the employee at the beginning of the employee's parental leave.
If an employee advises he/she is not returning, any remaining parental leave payments will cease and employment is considered to be terminated on the day the employee commenced leave.
Remember 'keeping in touch' days. These were introduced from 1 April 2016 but are (anecdotally) underutilised. This allows an employee to perform up to 40 hours of paid work during parental leave without affecting entitlements (to increase to 52 hours from 1 July 2018). These hours can be taken at any point more than 28 days after the birth. Keep this in mind for team trainings, 'away days' or other events and work that would ensure your employee can keep connected to the workplace during leave.
Frequently asked questions
What can an employer do if a pregnant employee is incapable of performing her work adequately, or unable to perform her work safely?
In appropriate circumstances, an employer can temporarily transfer a pregnant employee to another job or may direct a pregnant employee to commence primary carer leave early. If a pregnant employee is directed to commence primary carer leave early by their employer, the employee is entitled to take at least 10 weeks of primary carer leave after the expected date of delivery. This may require the extension of primary carer leave.
Are partners able to "share" parental leave?
Yes. Employees with 12 months' eligible service are able to share extended leave with their partners, less any primary carer leave taken.
What happens to service entitlements and holiday pay when an employee is on parental leave?
An employee’s service is deemed unbroken by parental leave. It follows that any rights or benefits that are conditional on unbroken service will go unaffected by parental leave (such as annual leave). Employees continue to accrue annual leave while on parental leave. However, different calculations apply for annual leave accrued during parental leave.
What are an employer's obligations to an employee who is on parental leave during restructuring?
There is a heightened test for redundancy under the Act which requires an employers to establish that there was no prospect of it being able to appoint the employee to a substantially similar position. This will require proactive and meaningful consultation with an employee on parental leave, including flexibility with timeframes and meetings.
This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.