ERA examines whether the IRD website provided ‘unclear guidance’ about work requirements
A mother who continued working for four weeks after giving birth sought a review of the Ministry of Business, Innovation and Employment's (MBIE) decision to decline her parental leave payment application.
She argued the IRD (Inland Revenue) website provided unclear guidance about the requirement to stop work immediately, while MBIE maintained the eligibility criteria were clearly stated and rigidly applied under the legislation.
Application circumstances and IRD decision
The worker gave birth to her child on 25 August 2024 and had been working part-time during her pregnancy.
Before the birth, she reviewed information on the IRD website regarding requirements to receive paid parental leave and advised her employer she would keep working part-time after the birth but would resign if it became too difficult to manage.
She says she could see nothing on the IRD website indicating there was a problem with this approach.
The worker continued to work after the birth of her child, but soon found this too exhausting.
Four weeks after the birth, she resigned from her employment, and a few weeks later, she applied for parental leave payments.
IRD declined her application on 10 October 2024 on the basis that she had not stopped work when her child was born, meaning she was not entitled to receive parental leave payments under the Parental Leave and Employment Protection Act 1987.
The Authority reviewed the decision on the papers with both parties lodging submissions and supporting documents in accordance with an agreed timetable, with the worker also lodging reply submissions and further information.
Eligibility and entitlement requirements
The ERA applied a roadmap established by the Employment Court for determining eligibility and entitlement to parental leave payments.
The ERA explained that a person is entitled to paid parental leave payments if they are an eligible employee or self-employed, with a two-limb test requiring the person to be the primary carer of the child and meet the parental leave payment threshold test.
There was no dispute that the worker was an eligible employee at the relevant time.
However, under the Act, an eligible employee is entitled to receive parental leave payments only if, during the relevant period, they are not employed or self-employed, or they take parental leave from their employment or self-employment.
The Act provides that a parental leave payment is payable for a period beginning on the earlier of either the date the person commences parental leave or the date of confinement.
The Employment Court had held that the Act prescribes criteria for entitlement, requiring certain persons to do certain things at certain times to receive that entitlement.
The Act does not specify when a person is to take parental leave, but to be entitled to receive government parental leave payments, their leave must align with the timing set out in the legislation.
Authority's entitlement assessment
The ERA found that the worker's circumstances did not meet the requirement that she not be employed or have taken parental leave from her employment during the period she was eligible to receive parental leave payments.
There was no dispute that she continued to work for four weeks after the birth of her child, meaning her parental leave did not align with the statutory timing requirements.
The worker submitted that because she did not stop work immediately on the birth of her child, she had not "returned to work within the reasonable interpretation of this requirement."
However, the Authority noted the Employment Court had held that "returns to work" means the date on which the person returns to perform paid work after the birth of the child, and once a person starts to perform work for which they are paid, they have returned to work.
The ERA found the worker, therefore, "returned to work" immediately following the birth of her child.
In order to be entitled to receive parental leave payments, she was required to have taken parental leave from her employment, but by returning to work immediately following the birth of her child, she did not comply with this requirement. This was the reason IRD declined her application.
Claims regarding website guidance
The worker argued the Authority should exercise its discretion in her favour due to deficient information on the IRD website, submitting she relied on the website when making work arrangements and only continued working as she believed on reasonable grounds that she could due to the guidance and criteria on the website.
She stated there was absolutely no mention or indication on the website that working post-birth would disqualify her for paid parental leave.
MBIE submitted that the IRD webpage in August 2024 explained that "parental leave payments start the earlier of when you go on parental leave and your date of confinement." the worker accepted this wording was set out on the website but said after her application was declined, she telephoned IRD to obtain further information and none of the staff she engaged with were able to locate this requirement or point her to clear guidance.
The worker underscored that the wording was not sufficiently clear or prominent, even to staff tasked with administering the scheme, and that with such a critical eligibility requirement, the guidance should have been unambiguous and prominently highlighted.
She contrasted this with other key criteria on the same webpage using stronger and definitive wording, such as "you cannot apply for paid parental leave after you return to work" and "you must stop work to qualify for paid parental leave."
Discretion considerations and determination
The Authority noted that under the Act, MBIE has discretion to approve making a parental leave payment despite an irregularity in the application, but this relates to matters of form only.
The Employment Court held that MBIE's discretion cannot be exercised in relation to matters of substance and does not allow moving the relevant dates of the parental leave payment period to another time period not provided for by legislation.
The ERA found the parts of the IRD website quoted by the worker suggested there was sufficient information on the website at the time of her application, noting that the worker could identify these relevant key criteria, which undermined her submission that she was disadvantaged by unclear guidance.
The Authority stated its role is to apply the legislation as enacted by Parliament and in light of guidance from the Court, not to provide guidance on web design.
The ERA found the worker's submission that modifying or reversing the decision would "align with the purpose of the Act to support parents as primary carers" misstated the purpose, which is to set minimum entitlements in respect of parental leave and entitle certain persons to up to 26 weeks of parental leave payments.
The Authority determined that the purpose requires persons to become the primary carer in respect of a child and stop working in order to be entitled to receive payments.
The Authority rejected the worker's submission that discussions with IRD staff after her application was declined should influence the exercise of discretion, noting there was no evidence to suggest this was a situation in which she was provided with incorrect or inaccurate information by IRD prior to her decision to continue working.
Final outcome
The ERA acknowledged the position the worker found herself in and accepted her submission that the appeal process had been stressful and frustrating, and that at all times she had acted in good faith.
The Authority accepted that the worker appeared to have misread or misinterpreted the statutory requirements and that this was a genuine misunderstanding.
However, the Authority determined that any discretion to modify or reverse the decision to decline her parental leave payments must be exercised in a principled way.
Even with a genuine misunderstanding, the ERA found that it cannot disregard the legislation and ignore the requirements that to be entitled to payments, the worker was required to stop work on her date of confinement, but she did not.
The ERA confirmed IRD's decision to decline the worker's application for parental leave payments, finding she regrettably did not meet the requirements of the Act.
Her request for the Authority to exercise its discretion to modify or reverse MBIE's decision was unsuccessful. There was no order for costs, with parties presumed to bear their own costs for review under the Act.
