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Paid Parental Leave Amendment Bill 2014
Introduced: House of
Representatives, 19 March 2014
Summary of committee concerns
The committee seeks further information on the compatibility of the
measure to remove the requirement for employers to provide government-funded
parental leave pay with the right to social security, the right to just and
favourable conditions of work and the right to equality and non-discrimination.
The bill seeks to amend the Paid Parental Leave Act 2010 (the
Act) to remove the requirement for employers to provide government-funded
parental leave pay to their eligible long-term employees. Instead, from 1 July
2014, employees would be paid directly by the Department of Human Services
(DHS), unless an employer opted in to providing parental leave pay to its
employees and an employee agreed for their employer to pay them.
Compatibility with human rights
Statement of compatibility
The statement of compatibility for the bill states that, while the Paid
Parental Leave Scheme engages the right to social security, the measures in the
bill are 'limited to administrative arrangements for delivering parental leave
pay to customers';
and concludes that, as such, the amendments do not engage any human rights.
Committee view on compatibility
to social security, including protection of the family and the right to just
and favourable conditions of work
Paid Parental Leave payments are available to persons, whether male or
female, who are the primary carer for a newborn child or recently adopted
child, provided they satisfy certain work, means and other criteria. This is
usually the birth mother of a newborn or the initial primary carer of an
Article 9 of International Covenant on Economic, Social and Cultural
Rights (ICESCR) states that:
The States Parties to the present Covenant recognize the
right of everyone to social security, including social insurance.
In addition, and of relevance to this bill, Article 10 of the ICESCR
Special protection should be accorded to mothers during a
reasonable period before and after childbirth. During such period working
mothers should be accorded paid leave or leave with adequate social security
The committee notes that, in addition to the right to social security,
the bill engages the right to work and the right to just and favourable
conditions of work.
This is because the benefits paid under the scheme are linked to participation
in the paid labour force.
The right to the enjoyment of just and favourable conditions of work is
guaranteed by Article 7 of the ICESCR.
The bill also engages the obligations to take measures to support the
and the rights of children in relation to family life.
The committee notes that the right to social security and the right to
just and favourable conditions of work are not absolute, and that the rights
may therefore be subject to limitations. Article 4 of ICESCR provides that
permissible limitations are those that are 'determined by law only in so far as
this may be compatible with the nature of these rights and solely for the
purpose of promoting the general welfare in a democratic society'. Where a
measure may limit a right, the committee's assessment of the measure's
compatibility with human rights is based on three key questions: whether the
limitation is aimed at achieving a legitimate objective, whether there is a
rational connection between the limitation and that objective and whether the
limitation is proportionate to that objective.
The Regulation Impact Statement included with the explanatory memorandum
for the bill notes that the removal of the mandatory employer role may impact
on employees with salary sacrifice arrangements in place. It notes that:
Where ... [an employee's] employer is administering the ...
[parental leave] payment, these salary sacrifice arrangements are able to
continue and so the employee’s tax liability would continue to be calculated on
a lower salary. However, as DHS does not offer salary sacrifice deduction
functionality, an employee’s tax liability could increase if the mandatory
employer role is removed and their employer does not opt back in. This may be a
particular issue for employees in the not-for-profit sector. This impact is not
a compliance cost, but is an impact on the after-tax income a person may
receive, dependent on an employee’s income and the level of salary sacrificed
under the arrangement.
The committee notes that, to the extent that the measure may result in
reduced after-tax income for employees with salary sacrifice arrangements in
place, the removal of the requirement for employers to provide
government-funded parental leave pay may result in a limitation of the right to
The committee therefore intends to write to the Minister for
Small Business to seek clarification as to whether the removal of the
requirement for employers to provide government-funded parental leave pay may
limit the right to social security and the right to just and favourable
conditions of work and, if so:
- whether the limitation is aimed at achieving a legitimate
- whether there is a rational connection between the limitation
and that objective; and
- whether the limitation is proportionate to that objective.
Right to equality
Article 2(2) of the ICESCR guarantees the right to non-discrimination in
the enjoyment of economic, social and cultural rights. Article 2(2) prohibits
discrimination, whether in law or fact, on prohibited grounds, including sex,
which has the intention or effect of nullifying or impairing the equal
enjoyment or exercise of the right to social security.
The right to non-discrimination is also recognised in a number of other
international human rights treaties.
A difference in treatment on prohibited grounds, however, will not be
directly or indirectly discriminatory provided that it is (i) aimed a achieving
a purpose which is legitimate; (ii) based on reasonable and objective criteria,
and (iii) proportionate to the aim to be achieved.
The committee notes that the statement of compatibility for the bill
does not address the question of whether the bill's potential to result in
reduced after-tax income for employees with salary sacrifice arrangements may
indirectly discriminate against women, given that the majority of paid parental
leave recipients may be women.
The committee notes that the assessment sought above in relation to the
right to social security will also be relevant to this analysis. Further, the
committee considers that, to the extent the measure is found to be compatible
with the right to social security, it is also likely to be consistent with the
right to non-discrimination.
The committee intends to write to the Minister for Small Business
to seek further information as to whether the bill is compatible with the right
to equality and non-discrimination.
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