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Parental Leave Tutorial

In this tutorial we look at parental leave from an employer's perspective

We examine each of an employer's obligations under the Act, in the order they are likely to arise. These are

Next we look at what to do when the employee goes on parental leave

We look at issues arising while the employee is on parental leave. These are

An up to date version of the Act is published on this website. We link to relevant sections throughout this tutorial.

Elsewhere on this website are assembled a number of FAQ's by the Employment Relations Service.

Parental leave legislation

All legislation relating to parental leave is in the Parental Leave and Employment Protection Act 1987.

This Act has been modified many times over the years, with the last amendment being in June 2002.

We have published our own copy on this website, and another copy exists on the Public Access to Legislation Project website. Both copies are up to date, and include all amendments.

Section 73 allows many procedural issues to be introduced by way of regulations - that is, without debate in Parliament.

Current regulations are the Parental Leave and Employment Protection Regulations 2002. We have not published the regulations on this site, but most of the forms referred to in this tutorial are designed by the Employment Relations Service, in accordance with the regulations.

The regulations are published on the Public Access to Legislation Project website.

What is parental leave

  • Parental leave is time off work available by law to new parents.
  • The leave is to provide employees with the opportunity to care for their newborn baby or an adopted child under five years.
  • There is a tax funded payment available to parents.

Who is eligible for parental leave

You are required to provide unpaid time off work for an employee who, at the expected date of birth or adoption, will have worked for you for

  • At least 12 months, and who has not taken parental leave in the 12 months before the expected date of birth or adoption, and
  • An average of 10 hours per week, on the basis of at least one hour every week or 40 hours every month. If the employee works an irregular employment pattern the normal pattern of hours over the period is used to establish the average hours.

Where there is a desire to share the leave between partners, both of them must meet the two eligibility tests above.

Recruitment

  • The Employment Relations Service of the Department of Labour say in many of their publications

"It is important to be aware that it is a breach of the Parental Leave and Employment Protection Act, and the Human Rights Act, to discriminate against a woman on the grounds of pregnancy"

  • We can find no specific reference to discrimination in the Parental Leave Act, but are sure that their advice is correct.
  • The Parental Leave Act is very specific about procedures taken when an employee becomes pregnant - that is the purpose of the Act. If these procedures are not followed, you have not discriminated against the employee - you have contravened the Parental Leave Act.
  • Discrimination is more likely to occur when recruiting staff. A detailed discussion of discrimination is outside the scope of this tutorial, but be aware of the issue when interviewing staff.
  • For example, when interviewing a female worker, you would be most unwise to ask "Do you intend to have children in the next few years?"

Employee requests for information

  • Until an employee has given written notice that they intend to take parental leave, there is nothing in the Parental Leave Act that requires an employer to advise an employee of their rights under the Act.
  • In spite of this, many employers may choose to do so.
  • By far the best solution is for the employee to call Industrial Relations InfoLine on 0800 800 863

Formal advice from an employee

  • The parental leave process is initiated by an employee giving written notice of their intention to take leave, as required by Section 31 of the Act.
  • The Employment Relations Service has sample letters on their website for this purpose.

Employer's response

  • Within 21 days of receiving written notice of an employee's intention to take parental leave, an employer is required to give the employee two forms, both of which must be set out in the manner prescribed by the Department of Labour.
  • The first form is required by Section 36 , in which you are to state whether the employee is entitled to parental leave, whether their job can be kept open, etc.
  • Full details are best gleaned by reading Section 36 , and also by downloading the prescribed form PDF 13KB.
  • The second form is the requirement of Section 71T to notify the employee of their entitlement to a taxpayer funded payment, and can be downloaded here PDF 39KB.

Taxpayer funded paid parental leave scheme

  • This scheme is covered by Part 7A of the Parental Leave Act.
  • The purpose is to entitle certain employees to up to 14 weeks of parental leave payments out of public money when they take parental leave from their employment in respect of a child.
  • Section 71I places responsibility for applying on the employee, and makes it obligatory for an employer to fill in certain parts of the application form when asked to do so.
  • To receive paid parental leave, the employee must complete the form and send it to the IRD before they either resign whilst on parental leave, or return from work after parental leave.
  • An employee must get an IR880 paid parental leave application form [PDF 201Kb] , fill in their part, then give it to the employer to complete.
  • If the employee wants to transfer some entitlement to a partner, they complete an IR881 paid parental leave transfer form [PDF 127Kb] instead.
  • After the employer has completed their part of the form, the employee sends the form to the IRD.

Written notice whether job can be kept open

  • Within 21 days after the beginning of an employee's parental leave, Section 38 requires an employer to give written notice indicating whether or not the job can be kept open.
  • There is a form for when a job can be kept open PDF 13KB , and another for when the job cannot be kept open PDF 14KB.
  • Be warned that if you claim a job cannot be kept open, and an Employment Tribunal decides it could have been, you may face a claim for constructive dismissal.

Holiday pay when going on parental leave

  • A staff member may ask to take holidays before taking their parental leave.
  • If so, handle exactly as you would for an employee who is continuing their employment.
  • Under no circumstances are you to make a holiday payment as you would for an employee terminating their employment.
  • If, at a later date, the employee claims unjustified or constructive dismissal, it will not help your case if it can be shown you paid holiday pay as you would for an employee terminating their employment.

Employer Monthly Schedule

  • When the employee goes on parental leave, do not enter a finishing date on the employee record.
  • If a finishing date is entered, it will be shown on the next schedule sent to the IRD.
  • Again, if at a later date the employee claims unjustified or constructive dismissal, it will not help your case if it can be shown that you sent a schedule to the IRD that showed a finishing date for the employee.

Employing a temporary replacement

Section 48 of the Act states

Where a temporary employee is employed to replace an employee who is on parental leave, the employer shall, before employing the temporary employee, inform the temporary employee in writing

(a) That the temporary employee is being employed on a temporary basis in the place of an employee who is on parental leave; and

(b) That the employee may return to work, in accordance with section 45 of this Act, before the date on which the employee is required to return to work at the end of the parental leave.

Public holidays after leave commenced

Section 42(3) provides for special treatment of public holidays that fall within 14 days after an employee goes on parental leave.

  • If a public holiday falls more than a fortnight after an employee goes on parental leave, no payment is required.
  • For every public holiday day that falls within the fortnight, you are required to pay a percentage of a days wages.
  • The percentage is the number of days the employee was not on parental leave in the fortnight preceding the public holiday.
  • In other words, if a public holiday falls exactly a week after going on parental leave, you are required to pay half a days wages for that day.
  • The above is an over simplication of the exact requirement. Full details are contained in Section 42(3).

Holiday pay during and after parental leave

  • Section 42(2) provides a unique method for payment of annual leave either during a period of parental leave, and in the 12 months following an employee's return from parental leave.
  • The Holidays Act requires that holiday pay be paid by comparing average earnings with the current daily rate, and taking the greater value.
  • Section 42(2) of the Parental Leave Act overrides this section of the Holidays Act, and provides instead that for employees who have taken parental leave, only the average earnings are used, meaning that an employer is effectively not required to accrue holiday pay whilst an employee is on parental leave.
  • Put another way, whilst the employee still accrues the same entitlement to annual leave in terms of the number of days, when these days are paid they are at a lower rate.
  • As an extreme example, say an employee took 52 weeks of extended leave as allowed by Part 3 of the Act. On return, they are immediately entitled to 4 weeks annual paid holidays for the year not worked. The payment is three weeks multiplied by the average weekly earnings, which is zero.

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