In a previous edition of Employment Matters we included a summary of the federal Government’s proposed paid parental leave scheme (PPL scheme).

The PPL scheme was passed by both houses of Parliament on 17 June 2010 and became the Paid Parental Leave Act 2010.

Before it was passed, a number of last minute amendments were made to the scheme.

Significantly, section 99A was added to clarify that the Government’s parental leave payments under the PPL scheme are to apply in addition to existing any paid parental leave that employers are required to provide under an enterprise agreement, award or any other “industrial instrument”, which includes a contract of employment. As a consequence, employers will not be able to use the funds paid to them as part of the PPL scheme to satisfy existing obligations to pay paid parental leave (for example under an enterprise agreement or a policy that forms part of an employee’s contractual terms).

Some employees who already provide paid parental leave are asking if they can put new arrangements in place whereby the amount of paid leave they provide is limited to the difference between their existing obligation and the amount that will be paid by the government. This may be possible, but employers are advised to proceed with caution and seek advice in order to minimise the risks of claims of breach of contract or other disputes with employees.

Another last minute amendment requires the Minister to review the scheme by 31 January 2013. In particular, this review will include looking at how the scheme is interacting with employer-provided paid parental leave.

Recently, on 13 October 2010, the Shadow Small Business Minister, Bruce Bilson, announced his intention to introduce a private member’s bill, which would amend the Paid Parental Leave Act so that Centrelink, rather than employers, would be the “paymaster” for the PPL scheme. The Opposition abandoned an earlier attempt to make similar amendments when the Paid Parental Leave Bill was debated in June because it did not want to hold up the commencement of the scheme.

Mr Bilson argued that the “paymaster” role will create unnecessary costs for employers and that if Centrelink can be equipped to be the “paymaster” for the first six months, there is no reason why it cannot continue in that role indefinitely. The Government has maintained its position that placing employers in the “paymaster” role will help women maintain a connection with their workplace whilst on maternity leave. The private member’s bill is yet to be introduced into Parliament.