Chapter 5: Other entitlements in Commonwealth employment

In addition to entitlements in the Maternity Leave Act, employees are able to access a range of other employee entitlements surrounding pregnancy, parental leave and returning to work. Throughout the Review, a number of issues with these entitlements arose, including how parents are made aware of these options, and how maternity leave in its current form can have undesired interactions with other entitlements.

This chapter examines these issues, with recommendations made to minimise the adverse impact parental-related leave may have on other entitlements, such as salary advancement. Recommendations area also made regarding actions agencies may take to ensure employees are aware of the full range of benefits available when taking parental-related leave.

Access to other paid leave on unpaid parental leave

The Act allows employees to access other forms of paid leave entitlements while on unpaid maternity leave.[153] Generally annual leave and long service leave will be granted where the employee has the necessary credits, however long service leave must still be used in accordance with requirements of the Long Service Leave (Commonwealth Employees) Act 1976 (Long Service Leave Act). This includes needing to account for the long service leave taken in calendar days rather than working days. Access to personal/carer's leave is not automatically granted, but considered on a case-by-case basis, usually requiring evidence to prove eligibly for the leave.

The Review proposes that employees on unpaid Parental Leave should continue to be able to use their accrued paid leave.

Recommendation 9: Continued access to other accrued leave while on unpaid Parental Leave

9.1   Employees to continue to have the option to use their accrued paid leave entitlements while on unpaid Parental Leave.

Accrual of leave

The accrual of further annual leave, personal/carer's leave and long service leave occurs only while an employee is on paid leave under the Act, or on other paid leave. Paid leave under Act does not have the option for half pay. Agencies may allow employees to take the Act's 12 weeks' paid leave at half pay spread over 24 weeks as an administrative arrangement, however the leave will only count for service for the first 12 weeks of paid leave.[154] Most APS enterprise agreement terms provide for annual leave taken at half pay to count as service for credit accrual[155], as does long service leave under the Long Service Leave Act[156]. Further discussion on half pay and related service periods is in Chapter 8.

Purchased leave

Purchased leave is available under most APS enterprise agreements and allows employees to fund additional paid leave for future use by reducing their fortnightly salary.[157] Rather than taking the immediate financial hit of leave without pay once other paid leave entitlements are exhausted, the cost of purchasing the additional leave is spread over a period of time, such as 12 months. Some employees purchase leave in the year before a child is born as a way of having more paid leave available during the maternity or parental leave period.

Alternatively, the leave could be used to return to work on a full-time basis by topping up reduced working hours with paid leave. Different agency-level rules to access such leave, however, can make this option difficult in practice.

"Given [the agency's] purchased leave policy, there are limitations in when you can apply and take the purchased leave, making it incredibly difficult to navigate in this situation. Furthermore, purchasing leave results in a drop in my fortnightly take-home wage. This is untenable when we also have to cover the costs associated with IVF, and plan for the unexpected costs that may arise."

- Individual submission[158]

Sabbatical leave

Sabbatical leave is another form of purchased leave that is available in some APS enterprise agreements which allows employees to accrue purchased leave over a number of years to then take a sabbatical.[159] Schemes like this demonstrate that it is possible for purchased leave to accrue over a number of years where the administrative infrastructure supports it.

Under the Department of Human Services Enterprise Agreement 2017-2020 (applicable to employees working in Services Australia), sabbatical leave can be purchased over four years to provide six to 12 months paid sabbatical leave in the fifth year.[160] This leave counts for service for the purposes of accruing annual and long service leave, and any withheld salary amount not accessed before ceasing employment with the agency is paid out, meaning an employee is not financially penalised for exiting the scheme early.

Agencies may consider using an existing purchased leave scheme for parental purposes.

Miscellaneous leave

The majority of agencies provide for paid and unpaid discretionary leave (variously known as Miscellaneous, Special or Discretionary leave) in enterprise agreements. Requests are usually considered on a case-by-case basis in line with the individual circumstances and supporting evidence. Discretionary leave is likely being used by agencies to offer leave for parental purposes as a work around to deal with deficiencies in the Act regarding eligibility.

While some agencies pay superannuation on unpaid maternity and parental leave (see Chapter 6), superannuation is not necessarily paid on unpaid Miscellaneous Leave for primary carer purposes, creating inequity between employees who are primary carers. Paid Parental leave for all parents, as discussed in Chapter 4, would address some of the reasons why agencies are providing Miscellaneous Leave for parental care purposes.

Other flexibilities available

Flexible Working Arrangements

Across Commonwealth employment, employees have access to a variety of working arrangements that provide the flexibility to manage their personal commitments while ensuring workplace operational requirements are met. Flexible working arrangements can be used throughout pregnancy and on return to work to balance health, caring responsibilities and work commitments. This can include flex time, time off in lieu, part-time work, working from home, purchased leave and job sharing. Most agencies have an enterprise agreement or policy that outlines the flexible working arrangements available within the agency.

Individual Flexibility Arrangements

Individual Flexibility Arrangements (IFAs) may be used for flexible working arrangements but can also provide other flexibility by varying conditions in the relevant agency's enterprise agreement or relevant award.[161] The State of the Service Report 2019-20 noted that 'to remain an employer of choice, and access new pools of talent, flexibility will remain an important component of the APS.'[162] IFAs will continue to be available to provide flexibility that meets the genuine needs of the employer and the individual employee.

Salary on parental leave

Performance-based salary advancement

Agencies have different performance cycle periods and different minimum standards to be eligible for a performance-based pay progression within a salary range, otherwise known as increments. Most agencies require performance of a satisfactory level, demonstrated by producing work rather than based on a period of service.

When an employee is on parental leave they are not producing work. Paid leave generally counts as service for continuing to accrue other entitlements; however, once parental leave becomes unpaid it no longer counts as service. Depending on the timing of the leave within a performance cycle, or if the leave is over 12 months in duration, an employee may not be entitled to a performance-based salary increase.

Overwhelmingly, the vast majority of people who take parental leave for an extended period of time are women, creating an environment where women's pay progression is disproportionately affected.[163] In conjunction with this, the earlier in a career a break is taken from paid employment or work part-time, the larger the impact on the superannuation balance and retirement savings.[164]

In some circumstances, it is the timing of the child's date of birth and subsequent leave within the performance cycle that can disentitle an employee to performance-based pay progression. For example, if a child is born at the beginning of a performance cycle and the mother takes over six months off work, they may not be eligible for a performance increment. However, if that child had been born a couple of months earlier and the leave was spread over two performance cycles, she would be eligible.

Women's economic equality is negatively impacted when women are delayed in receiving their performance-based salary progression. This is not only due to a stagnation of income, but also due to the cost of caring for a child, including child care. Delaying pay increases also compounds over time to significantly lessen women's superannuation balances at retirement age.

Evidence shows that men are less likely to take extended parental leave, such as more than a couple of weeks at the time of birth, if this will detrimentally impact their salary or career.[165] By changing how performance-based pay progression is calculated so all parents on parental leave could be eligible, more men may choose to take the parental leave available. This choice then has significant flow-on benefits for children, family dynamics, and women's economic equality. For women, continued access to salary increments while on leave will make a positive contribution to addressing the gender pay gap in the APS.

Recommendation 10: Pregnancy Leave and Parental Leave (paid and unpaid) to count towards salary progression

10.1   All Parental Leave and pregnancy-related leave is to count towards the employee qualifying for their next salary increment, where the employee would otherwise be eligible for a salary increment.

Change to working hours before commencing maternity leave

The Review's consultation with stakeholders noted the growing trend of part-time employees to increase their working hours to full-time just prior to commencing maternity leave. This is presumably to receive paid maternity leave at a full-time rate of pay. It is noted there is no minimum full-time service period required to be eligible for full-time pay under the Act, as the rate of pay is what would be paid on full pay if the employee was granted leave on account of illness.[166]

Changes in an employee's working hours -- for any reason -- is usually dealt with through agency-level policy, based on the agency's operational need and budget (including Average Staffing Level (ASL) limits) balanced with the personal needs of the employee through a flexible working arrangement request. Employees engaged on a part-time basis are likely to remain on part-time hours unless their job changes or they move to a different role. Most employees, however, are engaged on a full-time basis and can move between full-time and part-time hours through a flexible working arrangement.

Stakeholder feedback did not point to a consistent preferred approach for dealing with the issue. Many submissions commented on the issue, with suggestions ranging from not allowing pregnant employees to increase their working hours, to the maintenance of each agency's ability to retain flexibility to manage the issue, through to automatically moving all part-time employees on parental leave to full-time hours.

The Review does not recommend that part-time employees preparing to proceed on parental and pregnancy-related leave should routinely be able to convert to full-time duties simply for the duration of the leave. In that context, a full-time employee on an approved part-time arrangement should not be seeking an early cessation of the arrangement simply to access paid parental and pregnancy leave based on full-time hours.

In all other respects, agencies may continue to make a decision to change the ordinary hours in agreement with employees where there are reasonable business needs (balanced against the rights of employees to request flexible work arrangements under the NES), existing flexible work arrangements are expiring prior to the expected date of delivery, or other circumstances arise such that it is considered moving from part-time arrangements to full-time arrangements in appropriate circumstance.

Recommendation 11: Support agencies to establish practices so part-time flexible work arrangements are not ceased early simply for leave to be paid based on full-time hours.

11.1   Guidance or policy should support the intention that employees on a part-time flexible work arrangement about to commence parental and pregnancy-related leave do not seek to cease the arrangement early simply to access paid leave based on full-time hours.

11.2   Where there are reasonable business needs (balanced against the rights of employees to request flexible work arrangements under the NES), or an existing flexible work arrangement is expiring prior to the expected date of delivery, or other appropriate circumstance for moving from part-time to full-time hours prior to commencing leave, agencies may make a decision to change ordinary hours in agreement with an employee.

Future paid maternity leave

There is no requirement under the Act for an employee to return to work following a period of maternity leave in order to be eligible for a subsequent period of maternity leave.

When a pregnant employee commences paid maternity leave, they are paid at their rate of they would have received if granted leave on full pay on account of illness.[167] This means for employees who work part-time after returning from leave before commencing leave for a subsequent pregnancy, the rate of pay will be their part-time rate unless they change their working hours before commencing maternity leave.

Knowledge of entitlements

A number of submissions highlighted that employees are unaware of how taking parental leave can interact and affect the other leave and entitlements outlined above. Individuals who submitted to the Review expressed frustration at a lack of comprehensive information provided to them by their agency prior to commencing parental leave. Employees were often only made aware of the impact parental leave had on other entitlements after having returned from leave.

"I think the most difficult part I found when applying was around who to contact, what processes to follow and what resources were available to guide me through the process. I also received a lot of conflicting advice which was frustrating."

- Individual submission[168]

Further to this, many submissions noted how applying for leave can be confusing in some agencies with no information provided on how other leave entitlements can be used to optimise the paid leave available to them.

Submissions also reported a misunderstanding of stillbirth entitlements under the Act or that the language of the Act was not clear on first reading that it applied to stillbirths. The Act currently provides full entitlements when a pregnancy ends from 20 weeks gestation onwards, including in cases of stillbirth.[169] Pregnancy loss is discussed in Chapter 4.

Significant improvements could be made in how agencies share information with future parents on their leave and entitlements. A number of submissions by individuals reported their agency provided incorrect information or they were required to follow up multiple times to be provided with relevant advice regarding parental leave.

"I have had incorrect information given to me on multiple occasions and it is quite frustrating when I am not in a position to attend the workplace and get the answers for myself."

- Individual submission[170]

Submissions noted that employees on parental leave applying for loans sometimes had difficulties with seeking a letter of employment from their agency to confirm their ongoing employment. Parental leave is 'job protected' leave under both the Act and the Fair Work Act, and employees are entitled to their position, or a similar position in status and pay, on their return to work. The Review considers agencies should be encouraged to develop a streamlined process for actioning such requests from employees who are on leave.

Recommendation 12: Improve agency communication to employees about Parental Leave policies

12.1   Agencies are to make available a policy guide that is comprehensive and easily accessible about the Parental Leave entitlements available in the agency, including how these interact with the Australian Government Paid Parental Leave scheme administered by Services Australia. Timely and accurate responses must be provided to Parental Leave queries from employees.

12.2   Agencies are to ensure managers understand their role in supporting employees who are pregnant or on Parental Leave, including with regard to transitioning to parental leave, keeping in touch days, transitioning back to work, flexible working arrangements on return, and support for breastfeeding.

12.3   Employees on Parental Leave are to be provided with employment verification or similar documents if requested, for example to confirm ongoing employment and salary to financial institutions.

Access to Fair Work Act entitlements

The Fair Work Act and Paid Parental Leave Act provide further entitlements to pregnant employees and those on parental leave which are available in addition to entitlements under the Act.

To reduce administrative burden and streamline entitlements with related legislation, stakeholder feedback supported clarifying that employees entitled to leave under the Act are eligible for all unpaid parental leave and related entitlements under the Fair Work Act.[171] These can be claimed in conjunction with any paid entitlements under the Act or an agency's enterprise agreement.[172]

The Act already contains a precedent, with section 8 clarifying that employees on unpaid leave are entitled to the return to work guarantee under the Fair Work Act.[173] A number of the entitlements which apply to employees eligible for unpaid parental leave under the Fair Work Act are discussed below.

• Keeping in Touch Days: available under the Fair Work Act and the Paid Parental Leave Act, Keeping in Touch days provide up to 10 days of paid work while on either unpaid parental leave or Parental Leave Pay (or both) without comprising eligibility to entitlements.[174]

  • Current practice is to provide leave under the Act in one continuous block which generally cannot be paused. Submissions indicated this has limited employee access to Keeping in Touch Days while on paid leave.

  • It is unclear whether Keeping in Touch Days can be used during paid leave. A revised Act should clarify that employees are entitled to access these days, as this helps maintain connection with the workplace. This will also reduce administrative burden on agencies trying to manage entitlements under three sets of rules.

• Unpaid Special Maternity Leave: a pregnant employee may access unpaid special maternity leave if they are unfit for work due to a pregnancy-related illness, or because the pregnancy ends otherwise than by the birth of a living child after 12 weeks' gestation and before 20 weeks' gestation. [175]

• Extending unpaid parental leave: eligible employees on unpaid parental leave may request up to an additional 12 months' leave where that leave has not been used by their partner.[176]

Flexibility in taking leave is discussed further in Chapter 7.

Recommendation 13: Employee access to Fair Work Act Parental Leave entitlements

13.1   Employees entitled to paid or unpaid leave under the Act are to have access to the Fair Work Act's Parental Leave-related entitlements, including Unpaid Special Maternity Leave, Keeping in Touch days, extending unpaid Parental Leave, Flexible Unpaid Parental Leave, paid No Safe Job leave, right to request a return to work when a child is hospitalised, and unpaid pre-adoption leave. This includes any future additions or adjustments made to the Fair Work Act or the National Employment Standards (NES).

Access to Paid Parental Leave Scheme entitlements

Claiming Parental Leave Pay

Under the Paid Parental Leave Act, generally once an employee returns to work they are no longer eligible to further payments under the scheme, except for Flexible Parental Leave Pay that has not yet been claimed. While there are exceptions to this, if an employee chooses to claim the payments it is important to consider the timing of this when planning parental leave.

While Parental Leave Pay can be taken at the same time as any form of employer paid leave, Dad and Partner Pay cannot be.[177] To be eligible for Dad and Partner Pay an employee must not be taking paid leave during the same period. It is therefore important agencies recognise that in addition to entitlements to paid leave, an employee may request up to two weeks of unpaid leave during their child's first year in order to claim Dad and Partner Pay, regardless of whether they have paid leave available.

Recommendation 14: Facilitate access to the Government's Paid Parental leave scheme for parents

14.1   Agencies should support employees who wish to make a claim under the Australian Government Paid Parental Leave Scheme administered by Services Australia, or to meet other future Scheme requirements.