Unpaid parental leave is a fundamental workplace entitlement under the Fair Work Act 2009 (Cth) (FW Act), designed to give employees time off to care for and bond with their child, while also providing job security. 

Along with unpaid leave under the FW Act, employees may also be entitled to Government funded paid leave under the Paid Parental Leave Act 2010 (Cth) (PPL Act) or employer funded paid parental leave.

There have been several significant changes in recent years to the FW Act and PPL Act, offering greater flexibility and enhancing support for employees taking parental leave. These changes reflect a broader commitment to providing working parents with options that better suit their needs, prompting the question…what is the current state of parental leave in Australia?

Unpaid parental leave 

Who is eligible? 

All employees in Australia, regardless of whether they are national or non-national system employees, are eligible for unpaid parental leave under the FW Act if they:

1. have completed 12 months of continuous service with their employer. This includes:

• full-time employees;
• part-time employees; and
• regular and systematic casual employees who have a reasonable expectation that their employment will continue if not for the birth or adoption of a child; and

2. will have a responsibility for the care of:

• a newborn child they or their spouse/de facto partner gives birth to; or
• an adopted child under 16.

Where an employee is entitled to unpaid parental leave, this entitlement is preserved in circumstances of stillbirth or of the child passing away before they reach the age of 2.

How much unpaid parental leave can be taken? 

Employees who meet the eligibility criteria are entitled to 12 months of unpaid parental leave, which may be extended up to 24 months by agreement with their employer. This entitlement is not impacted by how much unpaid parental leave an employee’s spouse or partner takes.

How can unpaid parental leave be taken?

Employees can now take their unpaid parental leave flexibly. This means that it can be taken in one continuous block, flexibly, or a combination of both. Employees who give birth or adopt a child between 1 July 2025 until 30 June 2026, can take up to 120 days of flexible unpaid parental leave until the child turns 2 or within 2 years of the adoption. From 1 July 2026, this will increase to up to 130 days.

Return to work guarantee

Unpaid parental leave under the FW Act carries with it a return to work guarantee for employees. This means that employees are entitled to return to the role that they held before they commenced parental leave. This is the case even where another employee has been engaged to temporarily cover the role.

If the employee’s pre-parental leave role is no longer available, the employee is entitled to an available role that the employee is qualified for, suited to work in, and is nearest to their pre-parental leave role in pay and status. Where there is no alternative suitable role available, the employee’s employment may end due to redundancy. However, doing so is not without risk and we recommend that employers seek advice before taking any steps to make an employee’s role redundant while the employee is on parental leave.

Consultation during parental leave

Any consultation obligations that apply under the FW Act, an applicable award, enterprise agreement or other industrial instrument, will continue to apply when an employee is on parental leave. For example, the consultation obligations under the FW Act require an employer to take all reasonable steps to consult with the employee and discuss any proposed decisions that will have a significant effect on the status, pay or location of the employee’s pre-parental leave position, before the employer makes a firm decision about these matters.

This obligation was highlighted earlier this year in Stien v Hire A Hubby Pakenham [2025] FWC 510, where the employer failed to satisfy the required consultation obligations in a redundancy situation. In this case, the Fair Work Commission held that if an employer terminates an employee’s employment without consultation while the employee is on parental leave, the failure to consult is an important consideration in assessing whether the dismissal was unfair.

Government funded parental leave pay (PLP) 

Who is eligible for PLP? 

Employees are eligible to claim PLP under the PPL Act for a child if they are:

• the child’s birth mother or the partner of the child’s birth mother;
• an adoptive parent of the child or the partner of an adoptive parent of the child;
• a person who is a parent of the child and is not the child’s birth mother; or
• the partner of one of the parents of the child who is not the child’s birth mother. For example, the birth father’s partner (who is not the child’s birth mother) may also make a claim for paid parental leave.

However, to be eligible to receive PLP under the Government scheme, a claimant must also:

• be caring for a newborn or recently adopted child;
• meet the income test;
• not be working on parental leave pay days (except for allowable reasons);
• meet the work test;
• meet the residency rules; and
• be registered or have applied to register the newborn child’s birth with their state or territory birth registry.

How much PLP can be received?

The amount of PLP available depends on the date of birth or placement of a child. For children born or placed between 1 July 2025 and 30 June 2026, families will be eligible for maximum amount of 24 weeks of paid parental leave (120 flexible paid parental leave days). From 1 July 2026, this entitlement will increase to 26 weeks (130 flexible paid parental leave days). 

For coupled parents (as opposed to single parents), there is a 3 week pay period that is reserved for each parent or caregiver to use. This reserved period will increase to 4 weeks per parent or caregiver on 1 July 2026. Single parents or caregivers are otherwise entitled to the maximum amount of PLP.

The rate of paid parental leave increases every 1 July and is based on the national minimum wage. As of 1 July 2025, this rate is $948.10 per week (before tax) or $189.62 a day (before tax).

Employer funded paid parental leave

Most medium to large employers offer some form of employer funded paid parental leave in addition to the government’s PLP scheme (see here). Typically, we see larger employers providing between 12 and 26 weeks of paid parental leave to eligible employees, with a wide range of other ancillary benefits including superannuation contributions and the option to take double the period of paid leave by taking it at half pay. 

Tips for employers 

In light of the recent legislative updates and the evolving case law in this area, employers should consider the following issues when designing or revising their policies:

✓ Consider caregiver terminology

The FW Act and the PPL Act no longer distinguish between primary and secondary caregivers and recent case law has emphasised that the circumstances in which an employee may be deemed to be a ‘primary caregiver’ are broader than some employers had previously considered. Employers should be mindful of the ordinary meaning of these terms and consider whether and how they choose to define them, or alternatively, whether they wish to move to a universal approach and remove those terms altogether. See our recent article on the Full Bench of the Fair Work Commission’s decision in Metro Tasmania Pty Ltd v Australian Rail, Tram and Bus Industry Union.

✓ Acknowledge of the fluidity of caregiver roles

Where primary and secondary caregiver terminology is retained, employers need to be mindful that these caregiving roles are fluid and that an employee may have an entitlement as a primary and a secondary caregiver at different times during their period of parental leave. As discussed in the Full Bench of the Fair Work Commission’s recent decision in IEU v Peregian Beach Community College, the designation of a caregiver is not a fixed status and employees may switch between primary and secondary caregiving roles based on evolving circumstances.

✓ Implement gender-neutral and inclusive policies

Employer funded parental leave policies should be updated to use inclusive and gender-neutral language to ensure that all parents, regardless of gender or sexual orientation, have equitable access to leave entitlements. This will also help to mitigate any potential risk of unlawful discrimination claims.

✓ Maintain proactive communication

Employers should be proactive and maintain ongoing communication with their employees on parental leave whenever decisions are being made that could impact the employee’s role, including matters such as redundancies or changes to work arrangements or organisational structures.

✓ Consider flexible leave

Under the FW Act, a significant portion of unpaid parental leave can now be taken flexibly in smaller blocks including in single days. Employers should consider whether they wish to reflect this entitlement in their paid parental leave scheme or whether they require employer-funded leave to be taken continuously or at least in larger blocks of time.