Legislation protects workers on parental leave following infant death

Australian workplaces are undergoing significant legal and cultural transformation. Recent reforms and decisions are redefining how employers support their people. 

First, the Fair Work Amendment (Baby Priya’s) Bill 2025 ensures that employer-funded paid parental leave cannot be cancelled or refused if an employee’s child dies or is stillborn, including in surrogacy and adoption arrangements. This change brings greater certainty and compassion to families, requiring employers to honour existing entitlements in the most tragic circumstances. 

This development, along with others, signals a new era of fairness, openness and support in Australian workplaces. We explore what these changes mean for employers and employees and offer practical guidance for navigating the evolving legal landscape. 

Protecting paid parental leave rights in tragic circumstances  

Employers will be prevented from cancelling or refusing employer-funded paid parental leave if an employee’s child dies or is stillborn, including in surrogacy and adoption arrangements. The protection arises from proposed amendments made to the Fair Work Act 2009 (Cth) by the Fair Work Amendment (Baby Priya’s) Bill 2025 (Cth). The Bill inserts a new section 333X to the Fair Work Act. The Bill was passed by Parliament on 3 November 2025, after the Senate endorsed it without amendments.  

The Bill seeks to ensure that employers honour employee’s existing employer-funded paid parental leave entitlements in the event of stillbirth or infant death. Employers are not to refuse to approve an employee’s existing employer-funded paid parental leave because of the stillbirth or death and are not to refuse to pay the period of leave or cancel any part of that leave even if the leave has commenced.  

This change provides consistency and greater certainty to parents who were already entitled to unpaid parental leave and government-funded parental leave pay under the Fair Work Act and the Paid Parental Leave Act 2010 (Cth) in these circumstances.  

The Bill does not have retrospective application, meaning the protection is to apply only to existing and future employment contracts where a stillbirth or death of a child occurs on or after commencement.  

The Bill will not apply to: 

• Employees who do not already have employer-funded paid parental leave entitlements. 

• Employees who have expressly agreed with their employers otherwise. 

• Employees who request the cancellation of employer-funded leave in these circumstances.  

No cancellation of parental leave without express agreement 

Employers will not be exempt from the requirement in circumstances where an employee’s terms and conditions of employment provide for employer-funded paid parental leave but are silent or unclear on what occurs in the event of death of a child or stillbirth. 

Employers will also not be exempt from the requirement in instances where the employer has unilaterally varied an employee’s terms and conditions of employment to exclude the requirement after the new subsection 333X commences. This extends to workplace policies that form part of an employee’s employment contract. 

The new subsection will preserve employers’ and employees’ ability to negotiate in good faith when entering into employment contracts and new enterprise agreements that expressly provide for conditions to apply in the event of infant death or stillbirth, even after commencement of the new amendment.  

Existing terms for infant death leave can allow for cancellation of parental leave 

Where an employee’s terms and conditions of employment already provide for allocated leave expressly available in the event of infant death or stillbirth, employers will be entitled to refuse or cancel employer-funded paid parental leave. This separately allocated leave must not constitute or reflect standard unpaid parental leave and compassionate leave entitlements which employees are already entitled to as mandatory statutory minimums under the National Employment Standards.  

This new protection is to constitute a workplace right within the meaning of s. 341 of the Fair Work Act. Employees will have recourse to the general protection provisions to protect against any adverse action taken against them for accessing their existing employer-funded paid parental leave in the event of stillbirth of death of their child.  

The new subsection 333X(1) is a civil penalty provision under the Fair Work Act. You may incur the following penalties in circumstances of breach of the new protection: 

• For individuals: a maximum of 60 penalty units or 600 penalty units for a serious contravention. 

• For a body corporate that is a small business (less than 15 employees): a maximum of 300 penalty units or 3000 penalty units for a serious contravention. 

• For a body corporate that is not a small business (15 or more employees): a maximum of 1500 penalty units, or 15,000 penalty units for a serious contravention. 

Best practices for employers around parental leave, infant death 

• Employers should not cancel paid parental leave that an employee would otherwise be entitled to had the stillbirth or infant death not occurred, unless expressly agreed upon or requested by the employee. 

• Review all existing employment contracts, enterprise agreements and workplace policies which provide for employer-funded paid parental leave. 

• Do not amend policies following the Bill’s commencement to remove entitlements or allow cancellation in these circumstances. 

• Where an employment contract is silent as to employer-funded paid parental leave in circumstances such as infant death and stillbirth, the protection will apply. 

• Ensure that if alternative leave is being provided specifically for infant death or stillbirth that this leave is explicitly stated to be in respect of infant death or stillbirth. 

• While the Bill is not to have retrospective application, the new subsection may apply in some circumstances where an employment contract is in effect immediately before s. 333X commences and where the stillbirth or infant death occurs after commencement of the provision. 

• Communicate these protections and entitlements to employees. 

• Failure to comply may result in significant penalties. 

Fay Calderone is a Partner and Jacinta White is an Associate, both at Hall & Wilcox in Sydney and specialising in employment law.