New updates on the bill could have important repercussions for Australian employers
by Julian Arndt, Associate Director, Australian Business Lawyers & Advisors
The Albanese Labour government has, as one of its first legislative moves, introduced a bill to create a ‘universal’ entitlement to 10 days paid family and domestic violence leave (FDVL) into the National Employment Standards (NES).
The proposed entitlement replaces the current NES entitlement of five days unpaid FDVL and is available where an employee needs time off work to do something to deal with the impact of family and domestic violence in circumstances where they cannot attend to matters outside of work hours.
What is significant with the proposed bill is that it does not endorse or adopt the model of the Fair Work Commission, which recently made a determination to introduce a more limited form of paid FDVL into modern awards.
Key takeaway
The proposed bill introduced today is seeking a form of paid leave which is broader in scope, is available ‘up front’ and is paid out at a higher rate than the entitlement determined by the Full Bench of the Fair Work Commission.
The bill introduced today would give rise to a new form of paid leave under the NES which:
- is accessible by all employees including casuals who have been ‘rostered’ (eg have accepted an offer to work)
- is available ‘upfront’ meaning the leave does not accrue and is available in full (ie 10 days of pay) at the commencement of every year
- is payable at the rate that the employee would have earned had they worked instead of taking the leave (instead of being payable at base rates).
These characteristics make this new form of leave a unique form of paid leave within the Fair Work system. It is a form of paid leave available to casuals and will also likely require an employer to speculate what an employee would have been paid had they worked during the period of leave (that is, including loadings and allowances but also potentially commissions and incentive payments).
It will also allow all employees including casuals to take paid leave from the commencement of their employment. In a number of other changes, the definition of Family and Domestic Violence has been extended to include conduct by a member of a person’s household and a current or former intimate partner, and the entitlement has been extended to non-national system employees.
Given the bill introduces a new entitlement to the NES, the new form of paid leave will apply to all national system employees, including employees under enterprise agreements which already have paid FDVL entitlements. The bill includes an avenue for the Fair Work Commission to resolve ambiguities and inconsistencies between the new NES entitlement and existing enterprise agreement entitlements.
Government does not follow the Fair Work Decision
The much publicised Fair Work Decision [2022] FWCFB 2001 delivered in May 2022 arrived at an in-principle determination that all modern awards should be varied to include a paid form of FDVL. Significantly, noting the ‘operational difficulties’ that would arise should casual employees be provided with paid leave, the Fair Work Commission determined that paid FDVL should only be provided to permanent employees, consistent with other forms of paid leave under the NES and under modern awards.
Further, the Fair Work Commission determined that, contrary to the claim of the ACTU, the paid FDVL entitlement should not be provided ‘up front’ to employees; but rather it should accrue up to a maximum cap of 10 days. Finally, the Fair Work Commission determined that the leave should be paid out at base award rates.
The Fair Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022 does not follow the Fair Work Commission’s approach.
What this means for your business
To provide time for payroll and other necessary adjustments, the proposed new paid entitlement will commence on 1 February 2023 for employees employed other than by a small business employer. To recognise the unique needs of small business with limited human resources, an additional transition period of six months will be provided for employers who meet the definition of small business employer in the Act as at 1 February 2023 (ie fewer than 15 employees).
If you are concerned or require clarification on what this means for your business, please get in touch.
