The announcement of the 2015 Budget includes changes to the Paid Parental Leave (“PPL”) scheme that seem to contradict the government’s previous statements outlining the purpose of the scheme when it was introduced in 2011. 

The changes provide that, from July 2016, employees who receive paid parental leave under their employment agreement will only receive government-funded PPL to make up any shortfall from employer-funded PPL. If the employer does not provide PPL then the employee will be entitled to the full amount of government-funded PPL. Mr Hockey explained that the changes were to avoid the “double-dipping” that exists under the current arrangement.

Ms. Marian Baird, Sydney University professor and a member of an expert panel evaluating the existing PPL scheme, stated that the PPL scheme was intended to allow women to “complement” their entitlement to employer-funded PPL with government-funded PPL, with a view to women accumulating 26 weeks PPL to assist with early bonding and childcare. Professor Baird stated that “this is an astonishing about-face in policy”.

Impact on Employers

Whilst there is no direct impact on the obligations of employers as to whether or not to provide PPL to employees, it certainly raises longer-term considerations including retention of valued employees and provision of a family-friendly workplace. Employers may consider offering a more generous PPL to make up the shortfall for those employees who, prior to July 2016, would have received an additional $11,500 under the government-fundded PPL.

Christine Broad

Solicitor

BlandsLaw