Businesses cannot scrap individual parental leave schemes when Government scheme starts

Businesses will need to keep their own parental leave schemes as well as distribute the payments of the Government’s new program under new amendments to be introduced in the Senate today.

The proposed amendments come as businesses continue to protest over the fact they will be forced to distribute the payments to employees, even though the funds will be provided by the Family Assistance Office.

The Government is seeking amendments that would provide concessions for women who give birth prematurely, or experience some pregnancy-related medical problems and also pass the test imposed by the scheme.

But the biggest impact on business will be the amendment mandating they need to provide any maternity leave entitlements already in place on top of the Government’s scheme. This means that businesses cannot abandon their own payments in lieu of the Government’s – they must offer both programs.

This means the legislation, set to pass the Senate this week, will allow women to receive two different types of maternity leave payments.

The move will surely upset businesses, which have already protested vigorously against provisions which mandate they must distribute the Government’s money to employees.

A spokesperson for families minister Jenny Macklin was contacted for a comment this morning, but no reply was received before publication.

“If an employer already has an agreement to pay paid maternity leave [they] can’t use the government-funded leave to meet obligations to that woman,” Macklin told Sky News yesterday.

Bob Stanton, chairman of the Council of Small Businesses of Australia, says this amendment will provide significant problems for businesses, many of which feel burdened with the responsibility of distributing the Government’s payments.

“I would think this amendment would mainly relate to large businesses. And although there are a number of different ways schemes could operate, it does seem rather unfair that employers are responsible for two schemes.”

Stanton actually says the amendment could signal an eventual move to a business takeover of parental leave.

“This is something that businesses fear most. The Government has flatly refused to consider an opt out clause. We fear that it’s in the Government’s mind that businesses will end up paying for the scheme entirely, and this is an indication of that.”

The Government’s scheme will provide 18 weeks’ pay at minimum wage, to be distributed by the employer in most cases. Women need to have worked at least 330 hours in 10 of the 13 months before the birth, or adoption, with a maximum two-month break. A salary cap of $150,000 will also apply.

The amendments come after a Bank of Queensland survey yesterday revealed a majority of businesses believe parental leave is actually the responsibility of the individual.