Chapter 3: What are other employers doing?

This chapter provides an overview of parental leave policies and entitlements outside of Commonwealth employment, which are offered in addition to entitlements available under the Fair Work Act and Paid Parental Leave scheme.

Across the Australian community there are numerous paid and unpaid parental leave schemes operating through statutory entitlements, enterprise agreements, and workplace policies. While paid statutory schemes predominately cover public sector workers, the private sector has no statutory requirement for employers to provide paid parental leave. However, most large employers offer paid parental leave for primary carers.[56]

Policies take a number of forms, including employers topping up Paid Parental Leave and Dad and Partner Pay to full pay, offering fully paid leave entitlements in addition to these payments, or providing a lump sum payment. They typically fall into three broad categories: maternity, paternity, and shared parental leave. Maternity leave is generally only available to mothers, and paternity leave is generally only available to fathers and partners of women who have given birth. Shared parental leave is usually available to both parents, however how it is offered varies between schemes.

"Providing employer funded paid parental leave sends a strong signal to employees that their organisation is committed to supporting and retaining them, and it can be a cost-effective measure to retain valued employees."

- WGEA submission[57]

As at 31 March 2022, approximately 19 per cent of current Fair Work Act national system enterprise agreements contain an entitlement to paid primary carer's leave, with these agreements capturing 53 per cent of employees covered by a federal enterprise agreement.[58] The average entitlement provided is 13.2 weeks of paid parental leave for primary carers, with the most common offering being 14 weeks. Paid secondary carer's leave is available in approximately 14 per cent of current federal enterprise agreements, covering 45 per cent of employees. For secondary carers the average entitlement provided is 2.1 weeks, with the most common offering being just one week.[59]

Private sector

Employer-paid parental leave in the private sector has evolved significantly since a minimum standard was established in the Fair Work Act. Paid leave was originally provided only in the form of maternity leave. This progressed to include paid paternity leave, with terms such as 'primary and secondary carer' increasingly used in place of gendered language. Some private sector employers now provide parental leave of equal length to both parents regardless of gender, or a pool of leave to be shared between parents.

WGEA tracks paid parental leave provided by large private companies in Australia.[60] WGEA data shows that 60 per cent of large employers offer paid parental leave for primary carers in addition to the government scheme, with 91 per cent of those employers making no distinction between women or men taking the leave.[61] Half of employers in the dataset offer paid secondary carer's leave.[62] The average length of paid leave for primary carers is nearly 11 weeks and secondary carers receive an average of just over two weeks of paid leave.[63]

WGEA also awards annual 'Employer of Choice for Gender Equality' citations. The citation criteria specified for 2022-24 includes a minimum of eight weeks of paid parental leave at full pay for primary carers, plus superannuation on that paid leave, and at least three weeks of paid parental leave at full pay for secondary carers. For primary carers, superannuation must be paid at the minimum wage rate on any unpaid leave that brings the total leave period (paid and unpaid) up to 18 weeks. There must be no minimum service period to access the paid leave, meaning all employees will be eligible for paid parental leave regardless of length of service.[64]

The Workplace Gender Equality Act 2012 requires non-public sector employers with 100 or more employees to submit a report relating to gender equality indicators to WGEA each year.[65] In April 2021 the Commonwealth Government announced that the APS will start reporting to WGEA from 2022-23.[66] The passage of the Respect at Work Bill on 28 November 2022 implements an amendment to the Workplace Gender Equality Act 2012 to require Commonwealth public sector agencies to report on gender equality indicators.[67] Currently, the entitlements provided by the Act do not meet the standards required to qualify for WGEA's Employer of Choice for Gender Equality citation program.[68]

"Our consultation noted that we are at significant risk of losing talent early in staff careers due to choices about maternity and paternity leave, because of the competitiveness of the policies in the private sector, compared to the Government."

- Agency Employee Network submission[69]

Quantum and distribution of paid leave

Significant employers are currently offering 18-26 weeks paid leave for either parent. In the private sector, Grant Thornton, KPMG, PWC, Ashurst, King & Wood Mallesons and Gilbert + Tobin provide
26 weeks paid leave, Stockland offers 20 weeks, with Accenture, Deloitte, EY and PwC providing
18 weeks paid leave.[70] Telstra offers 16 weeks paid leave to all parents, and Medibank offers
14 weeks of paid leave regardless of gender or whether the parent is a primary or secondary carer.

Most of these employers are offering these entitlements regardless of gender and do not use 'primary' and 'secondary' carer labels, however some are offering these entitlements as primary carer leave, or provide the option for it to be shared between employee couples.

Private sector employers are increasingly moving towards offering policies that encourage fathers to take leave, which have a positive impact on gender equality. Research shows that where both parents take parental leave, paid and unpaid work is more equitably divided between the parents, improving family work-life balance.[71] Fathers taking parental leave supports bonding with their children, and models a more equitable parenting arrangement to the next generation that reflects modern community expectations.

In 2018, Medibank introduced 14 weeks of paid leave within the first 24 months for all employees, with no distinction between primary and secondary carers. This policy change increased the proportion of men taking parental leave longer than two months from 2.5 per cent to 28 per cent, with men taking an average of eight weeks of parental leave.[72]

Gender neutral parental leave policies, where all parents are entitled to an equal quantum of leave, does not automatically assume the mother will be the primary carer. The unintended consequences of policies where a distinction is made between the primary and secondary carer are discussed in Chapter 4.

Flexibility

Many private sector employers have adopted a flexible approach to paid parental leave to empower parents to take leave in a manner that best aligns with their circumstances. Often this includes allowing employees to take leave at any point during the first 12-24 months of a child entering the family, either in a single block, intermittent with periods of work, or both parents taking leave concurrently. Flexibility in private sector policies is also discussed in Chapter 7.

Additional entitlements

Private sector employers are also increasingly offering paid and unpaid leave for medical appointments related to pregnancy, support for attending fertility treatments, and other types of carers, such as grandparents.

Adoption / foster parents

Private sector employers are increasingly extending the scope of their parental leave policies to formal adoption and long-term fostering.[73] WGEA's Employer of Choice for Gender Equality citation criteria requires that parental leave entitlements are available under any circumstances where there is a new baby, including adoption.

As at 31 March 2022, 9.84 per cent of private sector enterprise agreements (covering 30.71 per cent of employees) include paid adoption leave. The average entitlement is 11.7 weeks of paid leave, and the most common entitlement to paid adoption leave is 14 weeks.[74]

Recruitment and employee retention

Employers with strong parental leave policies have greater recruitment and retention of staff.[75] Paid parental leave is increasingly becoming an incentive for new employees, with a 2016 Deloitte survey finding that 77 per cent of employees with access to benefits reported the amount of leave had some influence on their choice of employer.[76]

"A key component of [the agency] remaining an attractive place for current and future employees involves fostering a welcoming and supportive culture and offering conditions that are the same as or superior to key competitors. In important respects, Commonwealth employers are not keeping pace with employment conditions that support employees starting and raising families."

- Agency submission[77]

A 2012 study from Diversity Council Australia found that parental leave was a key driver of employment decisions as well as job performance for both women and men, including young men, male managers, young fathers, and men approaching retirement.[78]

State and Territory public sectors

The length of paid leave provided by jurisdiction for employer-paid maternity leave is generally 14 weeks (New South Wales, Northern Territory, Queensland and Western Australia) to 16 weeks (South Australia, Victoria and Tasmania). The Australian Capital Territory provides 18 weeks of paid leave to the primary care giver.

Paid leave for partners in each jurisdiction varies between one to fourteen weeks. Queensland and Victoria have adopted gender neutral approaches, providing the maximum entitlement to any parent who has a primary care role. From October 2022, New South Wales provides fourteen weeks' paid leave to each parent, with an additional two weeks' 'bonus leave' available to both parents if paid parental leave is 'more equally shared'.[79]

State and territory public sectors follow a similar approach of incorporating leave relating to the adoption of a child under the broader parental leave provisions.

Further information on state and territory public sector parental leave policies is provided in
Figure 3.1.

Figure 3.1 - Summary of State and Territory parental leave policies.