BILLS DIGEST NO. 95, 2019–20    11 May 2020

Paid Parental Leave Amendment (Flexibility Measures) Bill 2020

Don Arthur
Social Policy Section

David Markham
Law and Bills Digest Section

Date introduced: 6 February 2020

House: House of Representatives

Portfolio: Social Services

Commencement: Sections 1 to 3 of the Bill (the technical sections) to commence on the date of Royal Assent. Schedules 1 and 2 will commence on 1 April 2020.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at May 2020.

1 Purpose of the Bill

The purpose of the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 (the Bill) is to amend the Paid Parental Leave Act 2010 (the Act) to create a new flexible period of Parental Leave Pay. The Bill proposes to reduce the continuous paid parental leave period from 18 weeks to 12 weeks, while introducing six weeks (30 days) of flexible paid parental leave days which may be taken after the continuous paid parental leave but before the child’s second birthday. Alternatively parents may opt to continue using the existing 18 week continuous leave arrangements. The total period, and the rate of pay (national minimum wage), would remain unchanged.

The Bill also makes consequential amendments to the A New Tax System (Family Assistance) Act 1999 and changes to the A New Tax System (Family Assistance) (Administration) Act 1999 (the Family Assistance Acts).

The measure was announced in the 2018 Women’s Economic Security Statement and included in the Mid-Year Economic and Fiscal Outlook 2018–19.¹

2 Structure of the Bill

The Bill is divided into two schedules

• Schedule 1 contains changes to the Act and the Family Assistance Acts to implement the proposed changes to Parental Leave Pay and

• Schedule 2 contains transitional provisions.

3 Background

Despite its name, the current paid parental leave scheme does not provide an entitlement to parental leave. In their guide to parental leave, Erin McCarthy, Elise Jenkin and Andrew Stewart explain, the Paid Parental Leave Act 2010:

… does not in fact confer any entitlement to parental leave. Instead, it permits eligible carers to apply for what is, in effect, a social security payment that is spread over up to 18 weeks, so long as the carer does not return to work during that period.

Being able to receive this payment may help fund time away from work. But it does not of itself mean that a carer can take leave from their job, and be guaranteed that it will still be there when they want to return to work.²

Workers’ entitlements to unpaid parental leave are part of the Fair Work system created by the Fair Work Act 2009. Under the Fair Work Act, parents (on a gender neutral basis) may access up to 12 months of continuous unpaid parental leave,³ and may request an additional 12 months of leave.⁴ The Fair Work system is a national workplace relations system that covers most Australian workplaces.⁵

Many parents access ‘paid leave’ by combining their entitlements to Parental Leave Pay under the Paid Parental Leave Act with their entitlements to unpaid parental leave under the Fair Work Act. Under the Fair Work Act, unpaid parental leave may only be taken in a single continuous period and cannot be taken on a flexible basis in the same way that the Bill’s proposed flexible PPL period can.⁶

Alan Tudge, Minister for Population, Cities and Urban Infrastructure, recognised this in his second reading speech for the Bill:

Pending passage of the changes to the Paid Parental Leave Scheme, the government also intends to make complementary amendments to increase the flexibility of the existing unpaid parental leave entitlement in the Fair Work Act 2009. This will help ensure that parents who wish to access their parental leave pay flexibly will have access to a corresponding flexible unpaid parental leave entitlement.⁷

At the time this Digest was written, the Government had not provided information on these complementary amendments.

Parental Leave Pay under the Paid Parental Leave Act 2010

The Paid Parental Leave Act provides eligible working parents with up to 18 weeks of payment at the National Minimum Wage (currently $740.80 per week)⁸ when they take leave from work to care for a newborn or recently adopted child. The payment is known as Parental Leave Pay.

Parental Leave Pay is administered outside the workplace relations system. Policy responsibility for the scheme lies with the Commonwealth Department of Social Services (DSS) and the scheme is administered by Services Australia.⁹ These are the agencies responsible for the income support and family assistance systems.

Parental Leave Pay is available to parents who are self-employed as well as those who are employees. It covers employees outside the Fair Work System (such as some state public servants) as well as those covered by the Fair Work Act.

Eligibility

Generally, to be eligible for Parental Leave Pay, a person must be the primary carer of the child and be on leave or not working. The person must also satisfy a work test, an income test and an Australian residency test.¹⁰

Work test

Parental Leave Pay is not restricted to employees or to those who have an entitlement to unpaid parental leave under the Fair Work Act. It may also be available to independent contractors, people who are self-employed and employees who have been with their current employer for less than 12 months.

According to the Department of Social Services’ Parental Leave Pay Guide:

To meet the work test for [Parental Leave Pay], a claimant must have performed, whether in Australia or not, 330 hours of qualifying work over a period spanning at least 295 days (around 10 months) within the 392 day period (around 13 months) prior to the expected or actual [date of birth] or placement of the child for adoption.

… A birth mother may also satisfy the work test if Centrelink is satisfied they would have met the work test but for the fact that the child was born prematurely and/or they had pregnancy-related illness or complications that prevented them from performing paid work.¹¹

The Parental Leave Pay work test does not require a minimum period of continuous service with a single employer.¹²

Income test

Under the income test, claimants are not eligible for Parental Leave Pay if their adjusted taxable income is more than $150,000 in the relevant year. This is a ‘sudden death’ income test—that is, there is no taper.¹³ A claimant who earns $150,001 per annum will receive nothing as their income is above the threshold.

When introducing the Parental Leave Pay scheme in 2010, Jenny Macklin, then Minister for Families, Housing, Community Services and Indigenous Affairs, explained that the income test is ‘consistent with the principle of targeting government support to those most in need.’¹⁴ The principle of targeting according to need is widely used in the income support and family assistance systems.

Residency test

Claimants must also meet a residency test to be eligible for Parental Leave Pay (broadly speaking, this requires that the claimant be an Australian resident). The conditions are similar to those in place under family assistance law.¹⁵

How Parental Leave Pay is paid

To receive Parental Leave Pay a claimant must lodge a claim with Services Australia. For employees, Services Australia will normally pay the claimant’s employer and the employer will pass the payments onto the employee. However, in some cases, Services Australia will pay the employee directly.¹⁶ Services Australia will also pay a claimant directly if the claimant is self employed.¹⁷

Unpaid leave entitlements under the Fair Work Act

Currently the Fair Work Act provides employees with an entitlement to at least 12 months unpaid parental leave as part of the National Employment Standards.¹⁸

An employee can take unpaid parental leave when:

• they give birth

• their spouse or de facto partner gives birth

• they adopt a child under 16 years of age.¹⁹

The unpaid parental leave provisions in the Fair Work Act recognise same sex relationships.

Eligibility

To be eligible for unpaid parental leave an employee must have completed at least 12 months of continuous service with a single employer. This can include long term casual employees.²⁰

Because unpaid parental leave only covers employees, it does not provide any entitlements for independent contractors.

Both partners can be entitled to leave

Where both members of a couple are employees they may each be entitled to 12 months unpaid parental leave. The couple can take leave at the same time for a maximum of eight weeks. The rest of the leave entitlements must be taken at different times.²¹

An employee who takes 12 months unpaid parental leave can ask for an extension of a further 12 months. However, an employee couple cannot take more than 24 months of unpaid parental leave between them.²²

‘Use it or lose it’

An employee must take their leave entitlement in a single continuous period.²³ If an employee returns to work before the end of the leave period, they forfeit the remainder of their entitlement.²⁴

Comment

Because most employees rely on both the Fair Work Act and the Paid Parental Leave Act in order to access ‘paid leave’, employees would receive more benefit from the measures in this Bill if complementary amendments were made to the Fair Work Act.

When the measures in this Bill were first announced in the Women’s Economic Security Statement, the Government focused on the benefits of flexibility for women who were self-employed.²⁵ However, in his second reading speech Alan Tudge announced that the Government ‘intends to make complementary amendments to increase the flexibility of the existing unpaid parental leave entitlement in the Fair Work Act 2009.’²⁶

Currently, unpaid parental leave may generally only be taken in a single continuous period, on a ‘use it or lose it basis’. Unpaid parental leave then cannot be taken for flexible PLP days. This is acknowledged by the Explanatory Memorandum:

Currently, eligible employees are entitled to take up to 12 months’ [unpaid parental leave] UPL associated with the birth or adoption of a child. UPL must generally be taken in a single continuous period starting no later than the birth or adoption of the child. This means, under the existing framework, that once an employee returns to work they will usually forfeit any remaining untaken UPL.

If an employee wishes to access flexible Parental Leave Pay they will general (sic) need to negotiate time off work or a part time return to work with their employer.²⁷

It is not clear what amendments to the Fair Work Act the Government will propose. The desirability of complementary amendments to the Fair Work Act was also raised by a number of interested parties in commenting on the Bill (see below in the Position of Major Interest Groups section).

Women’s Economic Security statement

The measures in this Bill were announced as part of the 2018 Women’s Economic Security statement.²⁸ The statement emphasised the benefits to women who were self-employed. In a November 2018 interview, Kelly O’Dwyer, the Minister for Jobs and Industrial Relations and Minister for Women, said:

… we know that there are thousands of parents that don't access all of their parental leave payment, which means they are missing out. It’s a pretty rigid system right now. You have got your 18 weeks and use it or you lose it. We know that families actually want more choices about their family arrangements. It doesn't take into account that there are many women who are self-employed, who are running their own small-businesses and who can't spend 18 weeks away from their business. So we want to give them the flexibility to choose to take that parental pay leave payment in blocks in a way that suits them. We also recognise that there are many fathers who also want to spend time as the primary care-giver with their families as well.²⁹

The Women’s Economic Security statement did not mention complementary amendments to the Fair Work Act to improve flexibility for employees.

4 Committee consideration

Senate Community Affairs Legislation Committee

The Bill was referred to the Senate Community Affairs Legislation Committee for inquiry and the Committee reported in March 2020. Details of the inquiry are at Paid Parental Leave Amendment (Flexibility Measures) Bill 2020.³⁰

The Committee recommended that the Senate pass the Bill.³¹ In their additional comments, both the Labor Party Senators and Greens Senator Rachel Siewert recommended that the Bill be passed.³²

The Committee noted that while the submissions they received supported the measures in the Bill, they also put forward a number of proposals ‘to further enhance the paid parental leave scheme.’³³

In their additional comments, Labor Senators noted proposals to further improve the Paid Parental Leave Scheme and recommended:

Labor Senators call on the Government to bring forward significant improvements to Australia’s PPL system, in light of the evidence provided to the committee and reforms that have been implemented in similar countries.³⁴

While supporting the Bill, Australian Greens Senator Rachel Siewert argued that ‘additional reforms are needed to facilitate gender equality, value care work, and maximise the flexibility parents have to determine care arrangements for their children.’³⁵

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills had no comments on the Bill.³⁶

5 Policy position of non-government parties/independents

In her second reading speech on the Bill, Shadow Minister for Families and Social Services Linda Burney said that Labor supported the changes in the Bill.³⁷ As noted above, Labor Senators supported the Senate Community Affairs Legislation Committee recommendation that the Bill be passed.

In the second reading debate in the House of Representatives, the Leader of the Australian Greens Adam Bandt MP was supportive of the Bill, noting that ‘this bill goes some way towards addressing some problems’. However he considered that other changes to parental leave and industrial relations laws would be desirable.³⁸ As noted above, Senator Siewert expressed her support for the Bill in additional comments in the Senate Community Affairs Legislation Committee’s report into the Bill, while calling for additional reforms.³⁹

In the same debate, the Member for Indi, Helen Haines MP, supported the Bill, and stressed the desirability of increased flexibility that it provided. However, she suggested that paid parental leave legislation could be further improved by abolishing the distinction between primary and secondary claimants, so that parents could themselves decide how the provisions should be used, and that men might be encouraged to take a greater role in child care.⁴⁰

The Member for Warringah, Zali Steggall MP, also supported the Bill. She also suggested further improvements could be made in future, such as increasing the number of weeks’ paid parental leave and implementing policies that supported men who wanted to take time off work to care for their children.⁴¹

6 Position of major interest groups

21 interest groups made submissions to the inquiry by the Senate Community Affairs Legislation Committee.⁴² None of these groups opposed the Bill, however, several suggested further changes to the Parental Leave Pay scheme as well as changes to the Fair Work Act.

Suggested changes to the Parental Leave Pay scheme

A number of submitters argued that Australia’s Parental Leave Pay scheme could be improved by changes in addition to those in the Bill.

Sex Discrimination Commissioner Kate Jenkins described the Bill as ‘a further step forward in bringing the scheme of paid leave in Australia in line with international best practice …’⁴³ The Australian Association of Social Workers (AASW) submission stated: ‘While the AASW supports this Bill, we see it as an interim measure given that Australia’s paid parental leave scheme is deeply lacking if we compare it internationally to similar countries.’⁴⁴

Suggested changes to the scheme include:

• extending the Parental Leave Pay period⁴⁵

• raising the rate of Parental Leave Pay⁴⁶

• adding superannuation contributions to Parental Leave Pay⁴⁷

• making leave gender neutral.⁴⁸

Changes to the Fair Work Act

A number of submitters argued for amendments to the Fair Work Act. For example, the Australian Council of Trade Unions recommended:

The Fair Work Act should be amended to provide for a guaranteed, enforceable right to flexible working arrangements for parents and carers, with a right to revert to former hours once caring responsibilities have ceased.⁴⁹

7 Financial implications

According to information provided in the Explanatory Memorandum, the financial impact for the Bill is a cost of $25.183 million over the forward estimates.⁵⁰

8 Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.⁵¹

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights has no comments on the Bill.⁵²

9 Key issues and provisions

A basic summary of the amendments

The purpose of the Bill generally is to change the nature of the Paid Parental Leave scheme. Under current legislation, Paid Parental Leave is paid for up to 18 continuous weeks. This leave may be taken in the year after the birth of a child. The new scheme separates this 18 weeks into two separate periods—an initial block of 12 weeks (the continuous period), with the other six weeks (30 working days) being flexible days that can be taken within two years after the birth of the child.

It will still be possible under the new provisions to take Paid Parental Leave as an 18 week block by taking all of the flexible days immediately after the continuous 12 week period ends, but this is no longer the only option. Instead the flexible days can be taken at a time of the applicant’s choosing.

Additionally, flexible PPL days, other than those that are taken as a block in combination with the continuous period, are paid directly by the Secretary (in practical terms Services Australia) to the claimant.⁵³ This differs from continuous payments which are paid by the employer with funds either paid in advance or later reimbursed by the Secretary (as is the case for most claimants that have an employer during the continuous period).⁵⁴ The Explanatory Memorandum states:

This is to avoid putting an additional, unnecessary regulatory burden on employers.⁵⁵

The introduction of flexible PLP, however, will mean that, in some cases, claimants will first be paid through their employer for the continuous period, before being paid by the Secretary directly for their flexible PLP days.

The Paid Parental Leave scheme is still a government funded scheme. All PLP paid to a person, even if paid through an employer, is ultimately paid by the government.⁵⁶ The rate of pay and maximum number of permissible days remain the same as the current Act.

The current Act is already a somewhat complex piece of legislation, with over 300 sections. The task of adding flexibility for scheme recipients has, to some extent, added to this complexity, with the provisions in the Bill necessarily set out in detail. As far as is possible, this Digest will describe the new provisions in simple terms.

Naming convention

It should also be noted that there are two similar, but separate, acronyms with different meanings used in respect of this scheme—PPL is an abbreviation of Paid Parental Leave, and describes the scheme as a whole. PLP is an abbreviation of parental leave pay and refers to specific payments made under the PPL scheme.

Thus, a person accessing their PPL entitlement will be paid PLP.

Amendments to the Act

Dictionary & Outline Changes

Section 6 of the Act is entitled ‘The Dictionary’, and contains definitions of terms used in the Act. Many of the terms are not fully defined in section 6, but are rather defined by reference to other sections of the Act.⁵⁷ Items 17 to 24 inclusive of Schedule 1 to the Bill either add definitions of terms not previously used, or amend current definitions to include references to changes elsewhere in the Act proposed by the Bill. Item 19 adds definitions for new terms, including expected PPL period, flexible PPL day, and flexible PPL period, by reference to other proposed new sections, which are discussed below.

Claimants

The new provisions in regard to flexible PPL speak of three types of claimant – primary, secondary and tertiary. These terms are already defined in the Act.

The primary claimant is:

(a)    the child’s birth mother;

(b)    an adoptive parent of the child;

(c)    a person who satisfies the circumstances prescribed by the PPL rules as being exceptional circumstances in which a primary claim can be made.⁵⁸

A secondary claimant is:

(a)    the partner of a primary claimant;

(b)    a person who:

(i)        is a parent of the child; and

(ii)    is not the primary claimant;

(c)    a partner of a person covered by paragraph (b);

(d)    a person who satisfies the circumstances prescribed by the PPL rules as being exceptional circumstances in which a secondary claim can be made.⁵⁹

A tertiary claimant is:

Only a person who satisfies the circumstances prescribed by the PPL rules as being exceptional circumstances in which a tertiary claim can be made can make a tertiary claim for a child.⁶⁰

A tertiary claimant might be, for example, a person who was previously, but for specified reasons is no longer, the child’s primary carer.⁶¹

Effective continuation of current scheme, where applicant wishes

Item 25 of Schedule 1 to the Bill also proposes to add new section 6A into the Act, which effectively preserves the current PPL provisions. This section describes what will now be called ‘a continuous PPL period and a continuous flexible period’. This continues to allow, under the new regime of two payment streams, a person to take the full amount of PPL in an 18 week block. If the PPL is taken in this manner, the last possible day of PPL is the day before the child’s first birthday, as is now the case.⁶²

Flexible PPL Eligibility Provisions

Proposed new sections 31AA and 31AB of the Act, at item 96 of Schedule 1, set out when a person is, and is not, eligible for PLP on a flexible day for a child. These follow the current provisions in the Act, where section 31 relates to general eligibility for parental leave pay, and section 31A contains provisions concerning a waiting period for newly arrived residents. Item 96 of the Bill adds to this by inserting the eligibility criteria for PLP on a flexible day in proposed section 31AA, including a residency test, a care test, and a work and income test,⁶³ in regard to the day for which payment is claimed. If the claimant is the primary claimant (normally the birth mother) they must also satisfy the residency test at the birth date.

If the claimant is a secondary or tertiary claimant they are eligible if they satisfy the conditions prescribed by the PPL Rules (subsection 31AA(5)). The PPL Rules are defined in the Act as rules made by the Minister under section 298 of the Act. The current Rules can be found on the Federal Register of Legislation. These Rules will presumably need to be amended following passage of the Bill.

Proposed section 31AB sets out situations where a person is not eligible in respect of a particular day or days. This principally prohibits payment for more than the maximum of flexible PPL days, or multiple payments for the same day. The provisions also cover other situations such as the death of the claimant, or claims for a day during a newly arrived resident’s waiting period (NARWP). This last provision refers to provisions already in place in the Act in section 31A.

Generally speaking, a person subject to a NARWP is not entitled to PLP. However, there are exceptions to this where the person has been assessed as currently eligible for certain other government payments. Item 102 proposes to add two new subsections to section 31A, subsections 31A(6A) and (6B), which also allow payment of PLP for flexible days to a person where they are covered by one of those exemptions.

How a determination is made (proposed sections 11A to 11C)

PLP for a flexible day is payable to a person if the Secretary determines that it is. For a determination to be made the person must be eligible and make a claim. For payment for a flexible PPL day the day must be in the flexible PPL period determined under the Act. Generally, the flexibility period occurs immediately after the end of the PPL period where there is a single payability determination in force; where there is more than one payability determination in force the flexible period occurs immediately after the last PPL period in respect of the child.

Other flexible PPL Determination Provisions

Item 76 of Schedule 1 proposes to set out the provisions for determining whether flexible PPL days are payable to a claimant by inserting a new Division 2A of Part 2-2 into the Act, which will comprise sections 17A to 17D inclusive. Basically, a claim is payable when the payee is eligible for payment on that day or days under the various tests in the Act.

Proposed section 17A describes the decision-making process for determining a flexible PPL days claim from a primary claimant. If the claimant would be eligible for payment on a specific day, or days, the Secretary must determine that PLP is payable for the claimed days (proposed subsection 17A(2)). However, if the Secretary is not satisfied that the claimant is eligible, under proposed subsection 17A(4) the Secretary must reject the PPL claim in respect of certain days. In these circumstances, if no previous decision had been made on the applicant in respect of the work and income tests, the Secretary can determine that the claimant may be conditionally eligible for flexible days in the event of a future claim.

Proposed section 17B sets out the process by which the Secretary determines a secondary claim for flexible PPL days.⁶⁴ A secondary claim can be granted either where the primary claimant has given permission (proposed paragraph 17B(2)(a)), or where the claim was made in ‘exceptional circumstances’ (subparagraph 17B(3)(b)(i)). ‘Exceptional circumstances’ is not a defined term, and the Explanatory Memorandum does not explain it. In administrative law, the expressions ‘exceptional ‘or ‘special’ circumstances are generally taken to mean unusual circumstances that cannot be readily predicted or spelt out.⁶⁵

As part of the decision-making process regarding payment to a secondary claimant, the Secretary must be satisfied that the primary claimant satisfies the work and income tests. The secondary claimant must also be eligible for PLP on the claimed days (proposed paragraph 17B(2)(e) and subparagraphs 17B(3)(b)(ii)).

Similarly, proposed subsection 17C describes how a tertiary claim is to be determined. The Secretary may determine that PLP is payable to a tertiary claimant if a determination in respect of a secondary claimant is in force, and if the tertiary claimant would be eligible for PLP on the specified days.

Proposed section 17D allows the primary claimant to give permission, and later revoke permission, for persons to make secondary claims for flexible PPL days, up to the legislated cap for flexible PPL days (30 days).

Currently, section 57 states that a PLP claim must include a starting date, which can be changed before the payability determination is made. Item 116 of Schedule 1 proposes to add section 57A, which introduces similar provisions in respect of flexible PPL days.

Flexible PPL Payment Provisions

Item 42 of Schedule 1 introduces proposed provisions that set out when parental leave pay for a flexible PPL day for a child is payable. This can occur when a relevant determination of the Secretary under proposed sections 17A, 17B or 17C is in effect for a person.

Payment Provisions

Current sections 62 to 70 of the Act set out the provisions for the payment of PLP in instalments. Instalments can be paid either by the claimant’s employer or by the Secretary,⁶⁶ dependent on individual circumstances.⁶⁷ Items 122 to 127 inclusive either add to or amend the provisions in current sections 62 to 70 to include provision for flexible PPL.

Item 129 proposes to insert subsection 72(1A) in the Act. This provision will mean that the employer is only required to pay a claimant for a continuous PPL period, but including flexible PPL days that fall within that continuous period. Otherwise flexible PPL days will be paid by the Secretary. This is to avoid putting an additional, unnecessary, regulatory burden on employers.⁶⁸

As noted earlier, however, whether it is the employer or the Secretary who makes the payment, the scheme is ultimately funded by the Commonwealth.

Claim Provisions

Current section 60 is about when a claim for PLP should be made. Item 121 adds proposed subsection 60(2) which specifies the period in which a flexible PPL claim can be made. This period commences 97 days before the expected birth date and ends on either the child’s first or second birthday, depending on whether the primary claimant has made an effective PLP claim before the child’s first birthday. If an effective claim has been made in that timeframe, a flexible PPL claim can be made up to the child’s second birthday. If it has not, a flexible PPL claim can only be made up to the child’s first birthday.

Debt recovery provisions

Item 205 of Schedule 1 introduces proposed section 190A, which allows debts to the Commonwealth to be deducted from instalments payable under the Act. ‘Debts to the Commonwealth’ are already defined in the Act (section 181) as meaning only debts under this Act. These can arise in the case of mistaken payment or overpayment. That definition will also cover proposed section 190A. The significance of the inclusion of this section is that as PLP may now be paid for different periods separated by time, overpayments for earlier periods may be able to be offset by withholding future instalments. In the past, debts only arose after all PLP for a child had been paid.⁶⁹

Other provisions

Items 1 to 8 of Schedule 1 inclusive contain changes to the Family Assistance Acts, to incorporate reference to the new arrangements in the Act.

Items 129 to 145 inclusive contain necessary amendments to the current sections 72 to 82, which cover the payment of instalments by employers and contain provisions about the obligations of employers in these circumstances, to take into account flexible PPL. These provisions do not include any changes to general employer obligations.

Similarly necessary amendments are made to the current provisions in relation to the payment of instalments by the Secretary (items 146 to 154) and to the general rules regarding the payment of instalments (items 155 to 161). These amendments do not contain significant policy changes, other than the references to the new flexible PPL payments. The most significant change is that the introduction of flexible PPL payments will mean that these payments will be made by the Secretary, except where they are paid as a block immediately following the continuous period. Currently, because of the continuous nature of the entitlement, the employer is generally the vehicle for payment of PLP.

Items 162 to 187 inclusive amend various sections of the Act to include references to flexible PPL to the current provisions concerning employer determinations. These do not in the main involve significant changes. However, item 178, which introduces proposed subsections 108(1A) to (1D) into the Act provides for additional circumstances in which the Secretary must revoke an employer determination. The reasoning behind this is that it is not reasonable to make the employer pay in these circumstances, which are:⁷⁰

• where a payability determination for a flexible PPL day falling within the person’s continuous flexible period is revoked⁷¹

• where the PLP claim for a continuous flexible period includes a claim for weekend days.⁷²

Proposed subsection 108(1D) allows the Secretary to set a date of revocation of an employer determination. This can be a past date, which is permissible because it does not adversely affect anyone’s interests. In the case of a claimant, a retrospective revocation of an employer declaration will only affect who pays PLP, not whether PLP is paid or not.

Items 188 to 198 inclusive contain technical amendments to the current provisions in the Act about ‘dad and partner pay’, to take account of the new flexibility provisions, and to ensure consistency of language in the Act.

Other items not specifically mentioned in this Digest contain technical changes necessitated by the substantive changes in the Bill.

Transitional provisions

While the proposed commencement date for Schedules 1 and 2 in the Bill is in the past, it is noted that because of the drafting of the transitional provisions this may not have the effect of adversely affecting anyone’s interests.

The transitional provisions generally state that the old provisions will apply to children born before 1 July 2020 and that the new provisions will apply to children born on or after that date.⁷³

Item 3 of Schedule 2 sets out a number of items in the Bill that will not apply to parents whose children are born before 1 July 2020 to ensure that they will continue to receive the full benefit of the current legislative regime.

This is because an unintended consequence of the changes in the Bill could have been that the parents of children born before 1 July 2020 were adversely affected by the changes. This could have occurred because their entitlement to PLP would have been truncated by the operation of items 40 and 77 of Schedule 1, which cap the maximum PPL period at 12 weeks and do not allow flexible PPL payments for children born before 1 July 2020. The effect of this could have been that some parents in certain circumstances may have only been entitled to a total of 12 weeks PLP.

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Notes

[←1]

.    Australian Government, Greater choice for Australian women: Women's Economic Security Statement 2018, Department of the Prime Minister and Cabinet (PM&C), Canberra, 2018, p. 22. J Frydenberg (Treasurer) and M Cormann (Minister for Finance), Mid-year economic and fiscal outlook 2018–19, 2018, p. 8.

[←2]

.    E McCarthy, E Jenkin and A Stewart, Parental leave: a user-friendly guide, Thomson Reuters, Pyrmont, 2012, p. 2.

[←3]

.    Fair Work Act 2009, section 71.

[←4]

.    The employer may only refuse the request on ‘reasonable business grounds’ Fair Work Act 2009 (Cth), s 76(4).

[←5]

.    Those not covered include state and local government employees (unless their employer has a registered agreement in the national system) and many employees in Western Australia. See: Fair Work Ombudsman (FWO), ‘The Fair Work system’, FWO website, n.d.

[←6]

.    Fair Work Act 2009, subsection 71(2) and 72(2).

[←7]

.    A Tudge, ‘Second reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’, House of Representatives, Debates, 6 February 2020, p. 449.

[←8]

.    Fair Work Commission (FWC), ‘National minimum wage orders’, FWC website, last updated 27 June 2019; subsections 63(1) and 65(1) of the Paid Parental Leave Act 2010.

[←9]

.    Department of Social Services (DSS), Annual report 2018–19, DSS, Canberra, 2019, pp. 47 and 62.

[←10]

.    There are some exceptions and additions to the core requirements. These are detailed in the DSS Paid Parental Leave guide (PLP guide): ‘2.2.1 PLP eligibility overview’, Paid Parental Leave guide, DSS website, 1 July 2019.

[←11]

.    DSS, ‘2.2.2.10 When a person satisfies the work test for PLP’, PLP guide, DSS website, 2 January 2020.

[←12]

.    DSS, ‘2.2.2.20 Work test for PLP’, PLP guide, DSS website, 2 January 2020.

[←13]

.    DSS, ‘2.2.3 PLP scheme income test for PLP’, PLP guide, DSS website, 1 July 2019.

[←14]

.    J Macklin, ‘Second reading speech: Paid Parental Leave Bill 2010’, House of Representatives, Debates, 12 May 2010, p. 3207.

[←15]

.    DSS, ‘2.2.4.10 Australian residency test for PLP’, PLP guide, DSS website, 20 March 2019.

[←16]

.    Centrelink, Paid Parental Leave scheme employer toolkit, Department of Human Services, as at October 2017, p. 6.

[←17]

.    Services Australia (SA), ‘Getting your payment’, SA website, 16 September 2019.

[←18]

.    McCarthy et al, p. 38.

[←19]

.    FWO, ‘Maternity and parental leave’, FWO website, n.d.

[←20]

.    Fair Work Act 2009, section 67.

[←21]

.    FWO, Parental leave and related entitlements and the National Employment Standards, FWO, July 2017.

[←22]

.    Ibid.

[←23]

.    Fair Work Act 2009, subsection 71(2) and 72(2).

[←24]

.    However, a period of unpaid leave can include up to 10 ‘keeping in touch days’ where an employee can attend work for activities such as planning days, training and conferences (section 79A). See: FWO, ‘Keeping in touch days’, FWO website, n.d.

[←25]

.    Australian Government, Greater choice for Australian women: Women's Economic Security Statement 2018, op. cit., p. 22.

[←26]

.    A Tudge, ‘Second reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’, op. cit., p. 449.

[←27]

.    Explanatory Memorandum, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, p. 3.

[←28]

.    Australian Government, Greater choice for Australian women, op. cit., p. 22.

[←29]

.    S Lane, ‘Interview with Kelly O’Dwyer’, ABC AM, transcript, Australian Broadcasting Commission (ABC), 20 November 2018.

[←30]

.    Senate Community Affairs Legislation Committee, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, The Senate, Canberra.

[←31]

.    Senate Community Affairs Legislation Committee, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 [Provisions], The Senate, Canberra, March 2020, p. 15.

[←32]

.    Ibid., pp. 19 and 21.

[←33]

.    Ibid., p. 14.

[←34]

.    Ibid., pp. 18–19.

[←35]

.    Ibid., p. 21.

[←36]

.    Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 2, 2020, The Senate, Canberra, 12 February 2020, p. 5. Parliamentary Joint Committee on Human Rights, Scrutiny report, 2, 2020, February 2020, p. 9.

[←37]

.    L Burney, ‘Second reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’, House of Representatives, Debates, 13 February 2020, p. 1198.

[←38]

.    A Bandt, ‘Second reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’, House of Representatives, Debates, 25 February 2020, p. 1650.

[←39]

.    Senate Community Affairs Legislation Committee, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 [Provisions], op. cit., p. 21.

[←40]

.    H Haines, ‘Second reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’, House of Representatives, Debates, 25 February 2020, p. 1647.

[←41]

.    Z Steggall, ‘Second reading speech: Paid Parental Leave Amendment (Flexibility Measures) Bill 2020’, House of Representatives, Debates, 25 February 2020, p. 1653.

[←42]

.    Senate Community Affairs Legislation Committee, ‘Submissions’, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020.

[←43]

.    K Jenkins, (Sex Discrimination Commissioner), Submission to Senate Community Affairs Legislation Committee, Inquiry into the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, 12 March 2020, p. 1.

[←44]

.    Australian Association of Social Workers, Submission to Senate Community Affairs Legislation Committee, Inquiry into the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020, p. 4.

[←45]

.    For example, Australian Council of Trade Unions (ACTU), Submission to Senate Community Affairs Legislation Committee, Inquiry into the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020, p. 2; Queensland Nurses and Midwives' Union (QNMW), Submission to Senate Community Affairs Legislation Committee, Inquiry into the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020, p. 4.

[←46]

.    For example, National Foundation for Australian Women (NFAW),Submission to Senate Community Affairs Legislation Committee, Inquiry into the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020, p. 2.

[←47]

.    For example, Shop, Distributive and Allied Employees' Association (SDA), Submission to Senate Community Affairs Legislation Committee, Inquiry into the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020, p. 15.

[←48]

.    For example, Diversity Council of Australia (DCA),Submission to Senate Community Affairs Legislation Committee, Inquiry into the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020, p. 6.

[←49]

.    Australian Council of Trade Unions (ACTU),Submission to Senate Community Affairs Legislation Committee, Inquiry into the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, March 2020, p. 2.

[←50]

.    Explanatory Memorandum, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, p. 4.

[←51]

.    The Statement of Compatibility with Human Rights can be found at page 53 of the Explanatory Memorandum to the Bill.

[←52]

.    Parliamentary Joint Committee on Human Rights, Scrutiny report, 2, 2020, 12 February 2020, p. 9.

[←53]

.    Proposed subsection 84(2A) of the Paid Parental Leave Act 2010 (the Act) at item 147 of Schedule 1 to the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020.

[←54]

.    See current Part 3-2, Paid Parental Leave Act 2010.

[←55]

.    Explanatory Memorandum, Paid Parental Leave Amendment (Flexibility Measures) Bill 2020, p. 2.

[←56]

.    Paid Parental Leave Act, section 75.

[←57]

.    For example, “compliance notice: see subsection 157(3)”.

[←58]

.    Paid Parental Leave Act, subsection 54(1).

[←59]

.    Paid Parental Leave Act, subsection 54(2).

[←60]

.    Paid Parental Leave Act, subsection 54(3).

[←61]

.    Paid Parental Leave Rules 2010, clause 2.20.

[←62]

.    Proposed subsection 6A(4)(b)(ii) of the Act.

[←63]

.    These tests are already listed in section 31 of the current Act.

[←64]

.    A secondary claim is a claim made by a secondary claimant, typically the partner of the primary claimant.

[←65]

.    The Full Court of the Federal Court of Australia in Beadle v Director-General of Social Security (unreported version, Federal Court of Australia, Bowen CJ, Fisher and Lockhart JJ, 7 June 1985), (1985) 60 ALR 225, said ‘It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules’.

[←66]

.    Paid Parental Leave Act, section 63.

[←67]

.    Ibid., section 71 and the following sections describe the relevant circumstances.

[←68]

.    Explanatory Memorandum, op. cit., p. 2.

[←69]

.    Explanatory Memorandum, op. cit., p. 48.

[←70]

.    Ibid., pp. 44–45.

[←71]

.    Proposed subsection 108(1B).

[←72]

.    Proposed subsection 108(1C).

[←73]

.    Explanatory Memorandum, op. cit., p. 50.