Paid Parental Leave in Australia - Case Study Example

There is presently no provision or policy for paid parental leave in Australia and access to such leave is much restricted. Individual enterprise efforts determine the extent to which this leave is available in the community and private sectors and there is still very less knowledge about the basis on which individual companies and businesses introduce the practice of paid parental leave. This paper has drawn upon a number of case studies pertaining to the practices followed in this regard by some large organizations in Australia. Different rationales and perspectives that influence the decisions in such organizations have been outlined in this paper along with the manner in which they are implemented. Paid parental leave continues to be a fundamental issue in effecting equal employment opportunities for women but research has indicated that the potential effect of such a practice is much curtailed by limitations that are imposed on formal entitlements. The basis for such leave is adversely impacted by the practical availability of other family benefits in the working and organizational environment. Internationally, paid parental leave has for long been recognized as an important issue. The UN Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) and the International Labor organization (ILO) have recognized that paid parental leave has crucial importance in the working environment and the leave is most importantly, viewed as a means to avoid discrimination against women in regard to issues of marriage and maternity. It is also recognized that it is imperative to ensure that women are ensured their right to work and the leave becomes important in defraying the cost of bearing children across societies. PPL also acts as a measure in promoting gender equalities and assisting in the combination of family and working lives. Paid parental leave is presently understood as being integral in enhancing a mother’s connection with the working environment and the work force, in addition to reducing the transitions from being in and out of the labor force. It is observed that the relationship amongst facilities of paid maternity leave and rate of labor force participation amongst women is complicated and depends upon the accessibility to other support facilities like lesser working hours and child care facilities. The available evidence however is indicative about paid parental leave resulting in better employment outcomes as also economic security for female workers. As a fall out from such patterns, additional benefits also accrue to employers and to the entire economy in terms of higher levels of productivity. Australia is the only developed country along with the USA that does not have a national paid maternity leave policy. Currently the statutory provisions do not provide for paid maternity leave in regard to permanent employees of the federal and state governments and for employees in private sector paid maternity leave depends solely on the basis of provisions set by the enterprises. In some companies the provision of PPL has been introduced in terms of collective agreements through unions arising from practices such as collective bargaining, voluntary management initiative or through registered agreements. However the fact remains that most employed women in Australia do not have the facility of paid maternal leave. According to ABS (2003), only 36% of women employees had the facility of paid maternity leave. The recent survey conducted in Australia indicated that 37% of women that were employed before the birth of their child had access to some forms of paid maternity leave, (Whitehouse et al, 2006). The issue of paid maternity leave is considered very important by both males and females in meeting their personal obligations in terms of national and personal interest. An employee has narrated in this regard: “Many young people today are going through a financial crisis and simply cannot afford to have children, or have to return to work immediately after a birth. Leaving a 2-month old baby in the care of a stranger is not only heartbreaking for the parents, but will affect the child and eventually society too. A mother deserves to bond with her child and spend at least the first 6 months making this life changing adjustment at home with her baby. With the cost of housing, groceries and petrol, not many women can afford to stay home any more. A child being brought up in a comfortable, nurturing environment will not only benefit them, but society in general. How any mother is expected to be up at 5am to feed, bath and clothe her baby before getting herself ready followed by dropping the child off at childcare then off to work to repeat the whole scenario in reverse at the end of the day and then only have 6 hours sleep is beyond me. If you can’t afford it then don’t have children, they say? We’d have a seriously ageing population then because in the current financial situation, fewer people can or will be able to afford children. It shouldn’t be a luxury to be able to afford a child.”(AHRI, 2009) The access to paid maternity leave in Australia is unevenly distributed across different sectors. According to Baird and Litwin (2004), there is lot of variation across work centres in regard to the number of paid maternity leaves available (Baird, 2004). In Australia there have been proposals to introduce paid maternity leave from three different quarters in the last few years. The Pregnancy and Work Inquiry under Human Rights and Equal Opportunity Commision had recommended that the federal government should introduce practices of economic modelling in accessing the viability and advantages if paid maternity leave but the proposals were rejected by the government. The HREOC has been making attempts to impress upon the government to introduce a viable paid maternity leave scheme following widespread enquiries in regard to work balance and family responsibilities. An enquiry was conducted in 2007 that focused on the HREOC recommendations for government sponsored maternity leave schemes (HREOC, 2007). The government however expressed its inability to introduce the same in view of extra burden being imposed on tax payers as also because women that are not employed would not be able to get the benefits (O’Neill, 2004). The current policy of the Australian government does not envisage the provision of paid maternity leave and reliance is placed on initiatives made by individual enterprises to provide the facilities in the private sector. A better understanding should be had about the extent to which provisions can be made in providing a substitute for paid maternity leave. When the CEDAW was ratified by Australia in 1983, it was done by excluding the Article 11(2) (b) which deals with taking measures to incorporate paid maternity leave within the government framework. Unfortunately the government still continues to maintain the same status. The Chief of the Australian Government Office for Women had stated in a report in 2006 that 'Regardless of Australia's reservation with regard to paid maternity leave, Australia has a unique and comparatively generous system in place', referring to unpaid parental leave available, data which the Government claimed indicated 45 per cent of female employees receive PML, as well as the maternity payment made to mothers when they have a baby (Flanagan, 2006). The maternity payment scheme introduced in 2004 was devised to meet the cost of new babies but this scheme does not comprise of paid maternity leave as provided for under CEDAW. It also does not motivate women to become further attached with the work force nor does it compensate working women with income that is lost as a result of child bearing (Charlesworth and Charlesworth, 2004). Most European countries work towards developing family friendly policies by implementing mandatory measures that aim at high labour standards with initiatives to bring in collective bargaining, but the Australian approach is entirely different and most efforts are required to be made almost entirely by employers. Other options include enterprise bargaining by way of formal individual and collective agreements. In recent times Australia has seen some resilience, even from the perspective of the business operations. In emphasizing the mutual benefits of agreed family friendly benefit to both employees and employers, the Government has made efforts to reduce the expectation that all enterprises ought to provide some family friendly benefit to their workers. This approach depends upon individual employers to adopt if they feel the provision of family friendly benefits is in keeping with their interest and corporate goals. It is being increasingly stressed that small businesses must somehow be exempted from the provisions of the main family friendly benefit policies (Howard 2003,). While the political and community debates continued about the implementation of a national PPL scheme, the Government agreed that the inadequate access women had in low paid, part time and informal work must be paid maternity leave. However, instead of being viewed as supportive of the argument for a government supported scheme or government interventions to smoothening the cost of giving paid maternity leave for small businesses, the Prime Minister responded in saying that “to rule out imposing onerous obligations upon employers, particularly in small business” (Howard 2003,). Unions have played an important role in Australia in getting the issue of PPL onto business bargaining platforms in the private sector (O'Neill 2004). While there has been considerable union membership in several organizations, it was found that where PPL was included in the relevant agreements the unions played a minor role in the introduction of such schemes (Charlesworth and Probert 2005). Conversely, the willingness of managements to restrain union influences by introducing or enhancing PPL was a focus area in many organisations where there was large scale membership in unions. In some companies initiative was taken about PPL and other proposals was taken in allowing companies to better address the requirements of their employees by dealing with them directly, without getting caught up in nation wide union discussions. Companies have desired to control union influences in contributing to decide by influencing their management to introduce offers of PPL that could be in excess of applicable industry practices. While the unions negotiate for the initial PPL provisions of six and twelve weeks respectively, they have not been involved in any negotiations to enhance the number of such leaves. Nevertheless, since the leave provision has been in place, the unions have been using the established benchmarks in organisations that engage in enterprise bargaining negotiation in their respective businesses. Such patterns are particularly present in the National Tertiary Education. In terms of maintaining equity and to avoid discrimination a typical comment of a worker is as follows: “I am a senior HR practitioner and in my experience people use parental leave for their own ends then leave anyway. We need to be clear about why this idea is being proposed. I do not accept the view that people ‘need’ two incomes to live any more, except where they are on very low incomes. The truth is that they need two incomes to maintain the lifestyle they want. This is not something the taxpayer should pay for. Everyone I know would have taken the same amount of time to be with their newborn with or without paid leave – of course, they will gladly take the money – who wouldn’t? In addition, the fact that we are the only OECD nation not offering paid parental leave is, in my view, a sign that we are not sheep who follow blindly. It is no reason to change our policies. As a final note, bear in mind that the majority of HR practitioners are women, most of whom will benefit financially from this proposed change, so don’t expect an impartial view from this audience” (AHRI, 2009) External factors such as global and industry pressure and demands, legislative requirement, government policies and perception of community and social responsibilities are vital in establishing the practices of PPL. Of particular importance is the influence of the communities and political debate in regard to paid maternity leave. In 2002 and 2003 there were a number of debates that influenced both structure and the timing of PPL in several organisations. In some companies that are prone to provide paid maternity leave to its workers, the debate about PPL provided a basis for the matter that had not been present when earlier attempts were made in implementing the practice. During the several community debates about PPL, a lot has been made about the fact that Australia was lagging behind almost every developed country in not having national schemes in this regard. For many industries and organizations in Australia, providing PPL has become the basis in providing official approval for the facilities. The criteria used for paying PML varied from organisation to organisation. In some organizations all or part of the PML was paid up front while the remaining was paid while the worker was on leave or when she returned to work. Some companies paid a part of the applicable PML only after the employee came back to join duties PML is considered as a set of measures that support women with families and children in performing their responsibilities (Baird and Charlesworth 2007). A large number of workers feel that PML is necessary but not sufficient to encourage women to commence work after they become free from the responsibilities of bearing children. Family friendly benefits such as convenient access to opportunities for part time work and leave for child caring help workers a great deal in making up time. In a large number of organisations in Australia, the PML is accompanied by a number of family friendly working hours and flexible leave arrangement. Such schemes are aimed at directly or indirectly making female employees feel cared for. At present, paid parental leave does not form an important basis for community debates in Australia and the introduction of a national PML scheme in the country does not appear to be an immediate possibility. The changes in industrial relations as introduced by changing work choices threaten to harm the sensitive environment in the workplace relations in which issues related to paid maternity leave can be negotiated and implemented. Specifically, the changes have removed the test case mechanisms which can provide the minimum standards of unpaid maternity and parental leave including leave for caring. Such changes also alter the working conditions under which organisations function and decide about introducing benefits such as paid maternity leave. The new industrial relations regimes and the climate created by them along with the heavy emphasis that is placed on managerial discretions instead of workplace rights, will lead to the reduction in the sense of entitlement for such facilities (Lewis and Smithson 2001). Employees can presently desire to request and access PML and to negotiate flexible working arrangements upon returning from leave. Indeed, HREOC has been expressing concern about 'individual bargaining does not accelerate access to paid maternity leave, in fact quite the opposite' and that the move away to individual contracts will result in a reduction in employer-funded paid maternity leave (HREOC 2005, p. 22). Furthermore, in the policy and political perspective there is a deafening silence about the equal employment opportunities for women. There is very meagre support for any kind of orientation approaches in providing paid maternity leave including other applicable family friendly. Under such circumstances it becomes very difficult for people to harness any rationale in terms of what are the right things to do in this regard. It is beneficial for organizations to act in cohesion and commitment in pushing towards the introduction of new initiatives. References AHRI, The Parent Trap, (2009). The Parental Leave Debate, Australian Human Resources Institute Baird, M. and Charlesworth S. (2007), After the Baby: A Qualitative Study of Working Time Arrangements Following Maternity Leave, Labour and Industry, vol. 17 Baird M and Litwin A, (2004), Unpaid and Paid Maternity and Paternity Leave in Australia: Access, Use, and Options for Broader Coverage, in M. Barry and P. Brosnan, New Economies, New Industrial Relations, Proceedings of the 18th AIRAANZ Conference, vol. 2, Abstracts and Papers, AIRAANZ, Brisbane, pp. 2-9 Charlesworth and Charlesworth, (2004). The Sex Discrimination Act and International Law, University of NSW Law Journal, vol. 27. Charlesworth and Probert B (2005), Why some organisations take on family-friendly policies: the case of paid maternity leave, Refereed Papers vol 1, Proceedings of the 19th Conference of the Association of Industrial Relations Academics of Australia and New Zealand, University of Sydney, 9-11 February 2005. Flanagan K (2006). Consideration of Australia's Combined 4th and 5th Report by the Committee on the Elimination o fall Forms of Discrimination Against Women, Office for Women, Canberra, Read More