The Paid Parental Leave Amendment Bill 2014 (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.
The committee sought clarification from the Minister for Small Business
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:
Right of everyone to social security, including social
Article 9 of the International Covenant on Economic, Social
and Cultural Rights (ICESCR) recognises the right of everyone to social
security. This right requires a social security system to be established and
that State Parties must, within their maximum available resources, ensure
access to a social security scheme that provides a minimum essential level of
benefits to all individuals and families that will enable them to acquire at
least essential health care, basic shelter and housing, water and sanitation, foodstuffs,
and the most basic forms of education. Article 26 of the Convention on the
Rights of the Child requires that State Parties ensure that right for every
child and states that "the benefits should, where appropriate, be granted,
taking into account the resources and the circumstances of that child and
persons having responsibility for the maintenance of that child."
Article 10 of the ICESCR further states that, "Special
protection should be accorded to mothers during a reasonable period before and
after childbirth. During such a period working mothers should be accorded paid
leave or leave with adequate social security benefits."
In addition, Article 11 (2)(b) of the Convention to Eliminate
all forms of Discrimination Against Women (CEDAW) requires State Parties
"to introduce maternity leave with pay or with comparable social benefits
without loss of former employment, seniority or social allowances."
The Committee has sought: clarification as to whether the
measures in the Bill may limit the right to social security, to the extent that
the measure may result in reduced after-tax income for employees with salary
sacrifice arrangements in place.
Payments under the PPL scheme engage the right to social
security, and the amendments to the employer paymaster role under this Bill do
not limit the essential level of benefits required as part of that right.
Payments under the PPL scheme are currently considered to
provide an adequate social security benefit. The proposed amendments do not
affect eligibility for PLP or the entitlement to paid or unpaid leave from
employment before or after the birth of the child. The proposed amendments also
do not affect the rate of pay, which is consistent regardless of whether PLP is
paid by their employer or by the Department of Human Services (currently,
around 76 per cent of PLP recipients are paid by their employer and 24 per cent
are paid by the Department of Human Services).
Under the proposed amendments, in place of the current
mandatory requirement their employers pass on PLP to their long-term employees,
employers and employees would need to agree to this payment arrangement.
Similarly, there will still be capacity to make salary sacrifice deductions
against PLP payments where employers and employees agree.
The ability to make deductions for salary sacrificing is
unique to PLP amongst all government payments, given the PLP employer paymaster
role. This policy allows employers to apply the same treatment to PLP payments
they administer on behalf of the Government as for the payment of salary and
wages, if they so wish and can afford to do so. The ability for an employee to
reduce the tax liability for their PLP payment through salary sacrificing is
not guaranteed even under current arrangements. Therefore, there is no
limitation to the right to social security as these amendments do not limit
this essential level of benefit or limit access to the scheme, and allow the
continuation of salary sacrifice arrangements where the employer opts in and
Right to just and favourable conditions at work
Article 7 of the ICESCR recognises the right of everyone to
the enjoyment of just and favourable conditions of work. This Article seeks to
ensure fair and equal wages and remuneration, safe and healthy working
conditions, equal opportunity for promotion in the workplace, and adequate
access to rest, leisure, and periodic paid leave.
As discussed above, Article 11 (2)(b) of CEDAW also refers to
women being able to access time off work around the birth "without loss of
former employment, seniority or social allowances".
Payments under the PPL scheme do not engage the right to just
and favourable conditions at work as they are a government payment which is
provided on the basis of past labour force participation in addition to other
non-work related eligibility criteria. Access to PLP is not a condition of
employment and receipt of PLP through an employer does not ensure the
continuation of salary sacrifice deductions.
Despite the PPL scheme not engaging the right to just and
favourable conditions at work, access to the scheme encourages the continuing
participation of women in the labour force (either as an employee or in another
capacity such as self-employment). Generally, a working parent cannot work
during the PPL period if they wish to remain eligible for payment, however
limited participation is allowed through the use of 'keeping-in-touch' days.
The proposed changes to the mandatory employer paymaster role
do not limit the existing right to access 12 months of unpaid parental leave
without the loss of employment or seniority within the workplace, nor will the
measure affect the standards or provisions contained within the National
Employment Standards or the Fair Work Act 2009.
The committee sought further information from the Minister for Small
Business regarding the potential for reduced after-tax income to indirectly
discriminate against women and, accordingly, as to whether the bill is
compatible with the right to equality and non-discrimination.
Article 2 of the ICESCR recognises the right to
non-discrimination based on race, colour, sex, language, religion, political or
other opinion, national or social origin, property, birth or other status.
Article 3 seeks to ensure the right of both men and women to the enjoyment of
all economic, social, and cultural rights set forth within the convention.
The Committee noted that the extent the measure is compatible
with the right to social security it is also likely to be consistent with the
right to non-discrimination.
As outlined above, the proposed amendments do not limit the
right to social security. As the enjoyment of the right to social security is
not limited by the amendments, this Bill also does not limit the rights to
equality and non-discrimination.