Chapter 7: Flexibility and ease of administration

This chapter examines how access to paid leave under the Act is inflexible, particularly when compared to flexibility provided in agencies' enterprise agreements for supplementary parental-related entitlements. Recommendations are made regarding the flexibilities a new Act could provide.

Current issues with administration

Over 80 submissions to the Review raised the issue of flexibility, particularly regarding who is entitled to leave, and when and how leave can be accessed.

Submissions generally observed that the Act is inflexible in its current form and limits employees' access to adequate leave to support their families. Agencies also noted the increased administrative burden resulting from this lack of flexibility. Agencies also have to help employees understand which entitlements are derived from the Act and are inflexible, and additional elements provided in agency enterprise agreements which may be more flexible but can differ between agencies.

"The Act's focus on prescription and process does not lend itself to good outcomes for employees or agencies. Most of the concern in application is on ensuring tick boxes are met, rather than focussing on the wellbeing of the individuals or how they wish to approach leave related to birth and child caring."

- Agency submission[197]

Timing of leave - other parents

As the Act does not provide paid leave for parents who are not pregnant, rules around when these parents may commence leave are determined by individual agency enterprise agreements.

While requirements vary between enterprise agreements, submissions to the Review indicated that some policies may be overly prescriptive on the timing of leave. Flexibility in timing is also critical in circumstances of premature birth or other neonatal health concerns. Policy restrictions may create further stress and financial burden in what is already a difficult time for families.

"My workplace policy dictated that my parental leave as secondary carer (usually the fathers) must commence from the date of birth of the child. However, given I only received four weeks, this was not as useful to me because for the entirety of that time, my baby was in hospital unable to be brought home...Were I given that choice, I would not have commenced my parental leave until my baby was discharged from hospital after birth."

- Individual submission[198]

How leave may be taken

Maternity leave is generally provided in a single block of 12 weeks, with no break in this period. Submissions to the Review indicated that this practice limits choice for families taking leave in a way that suits their needs or facilitates a gradual return to work.

The current approach does not align with flexibility existing under the Fair Work Act and the Paid Parental Leave scheme. The Fair Work Act allows for up to 30 flexible unpaid parental leave days which can be taken one day at a time or in blocks within 24 months of the birth or adoption of a child. Similarly, up to 30 flexible parental leave days are available under the Paid Parental Leave scheme. For further information see Figure 2.3 in Chapter 2.

Both the Fair Work Act and Paid Parental Leave scheme also provide for up to 10 paid Keeping in Touch days, allowing employees to remain involved with their workplace without losing parental leave eligibility. However as discussed in Chapter 4, current practice in administering entitlements under the Act is that paid maternity leave generally cannot be paused, so employees cannot access Keeping in Touch days during this time.[199]

Agency submissions illustrated the administrative complexity resulting from this inconsistency. The example below discusses a situation where an employee sought to attend a specialised training course that was rarely available, but was scheduled during the paid component of their maternity leave. As there is no provision within the Act to break up leave and attend work, a more complex solution was necessary.

"...instead, the agency ended the maternity leave to allow [employee] to attend the scheduled training and then provided paid miscellaneous leave for the remainder of what would have been the paid maternity leave period. The employee had technically then relinquished the rest of her maternity leave under the Act, so the agency provided miscellaneous leave without pay for the duration of her desired absence and provided written assurance of the right to return to her role after leave. Being able to break up the original maternity leave with keeping in touch days would have made this much simpler to process for the agency."

- Agency submission[200]

Flexible Parental leave

Submissions to the Review particularly supported flexibility in how leave entitlements may be used. They pointed to employers increasingly offering leave which may be accessed within an extended period, including in days or blocks, or to facilitate a part-time working arrangement. Submissions indicated that flexibility is a key element of a competitive parental leave policy, with flow-on effects for employee attraction and retention.

A more flexible approach would bring Commonwealth employment into line with existing practice in the private sector and other public sector jurisdictions. Best practice private sector employers are increasingly providing flexibility for parents in how and when leave can be taken.[201] As noted above, this may include using leave in single days, blocks, or in combination with paid working days to facilitate part-time work.

A 2020 study showed that leading practice organisations are also extending the period of time in which parental leave entitlements may be taken, generally from 12 months to approximately 18-24 months.[202] Deloitte has allowed leave to be taken flexibly within 3 years since 2019.[203]

Flexible parental leave also allows employees to use their leave to facilitate part-time working arrangements while earning a full time salary. This allows for a higher employer superannuation contribution than if an employee were simply working part-time, helping close the retirement superannuation gap in the future. This approach would also help incentivise men to take up part-time working hours upon return from parental leave.

Flexibility is also offered in other state and territory public service policies. In the NSW public service, parental leave may be taken flexibly within 12 months of the child's birth, adoption, or surrogacy to meet operational requirements and the needs of the employee's family, as agreed between the employer and employee.[204] In the Victorian Public Service, parental leave does not need to be taken in a single continuous period, and may be taken at any time within the first 52 weeks of the child's birth or adoption based on agreement between the employer and employee.[205]

The Review acknowledges that the introduction of flexible parental leave entitlements may present some initial challenges for agency operational requirements. However, in terms of ease of administration, several agency submissions supported increased flexibility to reduce current burden resulting from the prescriptive nature of the Act.

The Diversity Council of Australia notes that 'the best way to reduce unnecessary prescription, process and complexity is to create flexible parental leave policies. When a policy enables flexibility there is less need to be overly prescriptive about rules and anticipating every scenario that could arise.'[206] Additionally, providing flexible work practices is linked to improved organisational productivity, enhanced employee attraction and retention, and improved employee wellbeing.[207]

"Flexibility to break up paid and unpaid portions of leave would be useful to facilitate an employee's ongoing access to workplace opportunities, keeping in touch and a graduated transition back to work, at no additional cost."

- Agency submission[208]

Flexible parental leave policies also promote gender equality. One of the five priority areas in the Women's Economic Security Statement 2020 is greater choice and flexibility for families to manage work and care.[209] In facilitating this, flexibility measures were introduced into the Paid Parental Leave scheme as detailed above.

Submissions to the Review indicated that increasing flexibility in how employees may use parental leave entitlements will bring the APS into step with other large employers, and better meet the needs of families.

Recommendation 16: Allow Parental Leave to be taken flexibly

16.1   Parental Leave may be used flexibly within 24 months after the date of birth or placement of the child, including in single days, blocks, or to facilitate a part-time working arrangement.

16.2   Parents may take Parental Leave concurrently or at separate times within this period.

Half pay option

The Act does not provide for maternity leave to be taken at half pay. Most agency enterprise agreements allow employees to elect for an administrative arrangement to spread the Act's 12 weeks' full pay over an equal period of unpaid maternity leave at a half their normal salary.[210] As this is an administrative arrangement only, the second period of leave is still treated as leave without pay and therefore does not count as service.

Whether any period beyond the first 12 weeks of leave counts for service depends on the agency's enterprise agreement term or policy, resulting in inconsistent outcomes for employees across the APS. In contrast, where agencies offer other types of leave at half pay such as annual leave, most count the full period of leave as service.[211] Given the length of paid maternity leave, this inconsistency may significantly disadvantage mothers in accruing further leave entitlements.

Submissions supported a revised Act providing for leave to be taken at half pay. This would recognise the full period of paid leave as service, provide consistency with how other leave types operate, and contribute to reducing the financial impact of taking Parental leave. Administration is also simplified by operating within a consistent approach.

Recommendation 17: Parental Leave may be taken at half pay

17.1   Parental Leave may be taken at half pay, on the basis that the leave period at half pay is twice as long. All Parental Leave taken at half pay is to count as service on the same basis as other paid leave.

Central ASL Pool

Employees absent on leave create gaps in the workplace. Managers generally work to a budgeted staffing limit, which includes the cost of their staff on leave. In the APS this budgeted limit is known as an Average Staffing Level (ASL). Managers find greater flexibility in being able to temporarily backfill the role of an employee on maternity leave where the agency manages the ASL impact via a central pool.

With the Review strongly encouraging all parents to have equal access to Parental Leave, the impact of more staff being absent could be managed if all Parental Leave ASL was held within a central pool. This would encourage managers to approve Parental Leave for fathers and other parents if they have greater flexibility to temporarily backfill the role during the absence. This approach will also assist with normalising the practice of fathers and all parents seeking to take Parental Leave and being supported to do so in the local workplace.

Recommendation 18: Agencies encouraged to manage their budgeted Average Staffing Level (ASL) in central pool for all employees on parental-related leave

18.1   To ease the budget impact on local work teams and allow for temporary backfilling of roles, agencies to consider pooling the ASL for all employees on parental and pregnancy-related leave if not already in place.