Parental leave remains a foundational workplace right under Australia’s Fair Work Act 2009, ensuring eligible employees have time to bond with a child while retaining job protection. In addition, many employees may qualify for government-paid parental leave or employer-sponsored paid leave. Recent legislative updates and case law have introduced greater flexibility and clarity. So, where do things stand now—and what should employers know?
Unpaid Parental Leave
Eligibility Criteria
Under the Fair Work Act, most employees become eligible for unpaid parental leave once they’ve completed 12 months of uninterrupted service with their employer. This includes full-time, part-time, and certain regular casual employees (those with a reasonable expectation of continued employment) who will care for a newborn or adopted child under 16. That entitlement extends even in tragic circumstances such as stillbirth or if the child passes away before age two.
Duration & Extension
Eligible employees are entitled to a base period of 12 months of unpaid leave. With mutual agreement, this can be extended up to 24 months. Importantly, the leave taken by a partner does not reduce this basic entitlement.
Flexible Leave Arrangements
A notable recent change is increased flexibility in how parental leave may be taken. For births or adoptions between 1 July 2025 and 30 June 2026, employees may access up to 120 days of flexible parental leave (to be used before the child turns two). From 1 July 2026, that cap increases to 130 days. The leave may be split, taken in shorter blocks, or combined—rather than a single contiguous block.
Returning to Work
Employees returning from parental leave are guaranteed reinstatement to their former role. If that specific position no longer exists, they must be offered a role for which they are qualified and that is as close as possible in status and pay. If no suitable role exists, termination on redundancy grounds may occur—though employers should proceed cautiously.
Ongoing Consultation
Obligations to consult with an employee persist even during parental leave. Where there are proposed changes affecting the employee’s prior role (e.g. relocation, job restructuring, or redundancy), employers must take “all reasonable steps” to engage the employee in meaningful consultation before final decisions are made. Failures in consultation have been found to influence claims of unfair dismissal.
Government-Funded Paid Parental Leave (PPL Scheme)
Who Qualifies
Under the Paid Parental Leave Act 2010, eligible claimants include birth parents, adoptive parents, and non-birth parents (or their partners). Qualification also depends on meeting income tests, residency requirements, the work test, and registration of the child’s birth.
Available Benefits
For children born or placed between 1 July 2025 and 30 June 2026, eligible families can receive up to 24 weeks of paid parental leave, delivered as 120 flexible paid days. From 1 July 2026, that entitlement rises to 26 weeks (i.e. 130 flexible days). For couples, a three-week period is reserved for each parent (rising to four weeks in 2026). Single parents or caregivers may access the full entitlement. Payment rates increase annually (as of 1 July 2025, the rate is AU$948.10 per week pre-tax, or AU$189.62 per day pre-tax).
Employer-Funded Paid Leave
Many medium and large organisations supplement the government scheme with employer-sponsored paid parental leave. These typically range from 12 to 26 weeks and may include additional perks such as superannuation contributions or options to take leave at half pay for longer duration.
Employer Best Practices: Key Considerations
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Adopt inclusive caregiver language
Recent legal interpretation broadens how “primary” and “secondary” caregivers are understood. Employers should carefully consider whether using such labels is beneficial or whether a universal “caregiver” framework is more appropriate. -
Recognise role fluidity
Parenting roles change. An employee may begin as a secondary caregiver but assume a primary caregiving role partway through the leave. Policies should allow for such shifts without discriminatory barriers. -
Use gender-neutral and inclusive drafting
Leave policies should avoid gendered language and ensure all parents or caregivers (regardless of gender or sexual orientation) have equitable access to leave entitlements. This not only promotes fairness but reduces exposure to discrimination claims. -
Maintain clear, ongoing communication
Employers should engage with employees on leave regarding structural or role changes potentially affecting them. Transparent dialogue can reduce misunderstandings and mitigate legal risks. -
Offer flexibility in paid leave policy
Given that unpaid leave now allows flexible uptake, employers should assess whether their paid leave schemes should also permit splitting, shorter blocks, or hybrid structures rather than rigid continuous blocks.
Conclusion
Parental leave entitlements in Australia have evolved to provide more flexibility and inclusivity. Employers must stay abreast of legislative changes, ensure policies align with legal interpretation, and proactively foster supportive practices. Doing so helps both employees and organisations thrive.
Disclaimer: This blog post is for general information only and does not constitute legal advice. Please seek tailored legal advice before acting on any of the information provided.