As of 1st July 2023, significant changes to the federal government’s paid parental leave entitlement will come into effect.
Couples of an adopted child that comes into their care or is born as of 1st July 2023 can access the new government paid parental leave entitlement.
The primary change is that the current 18 weeks of pay at the national minimum wage, paid by the federal government, will be combined with the 2 paid weeks of ‘Dad and Partner Pay’ (DPP) entitlement. In a practical sense, this means a greater portion of the total 20 weeks of pay can be taken by Dad/partner. The caveat, however, is that both caregivers will be entitled to 2 weeks minimum of the entitlement respectively. The remaining 16 weeks can be split any which way. Single parents can claim the full entitlement.
Partnered employees (secondary caregivers claiming the DPP) may still be able to take concurrent parental leave with their employer while claiming the paid parental leave.
Other changes to the legislation that will also come into effect include:
- The threshold for claiming the entitlement will be a combined income of $350,000 (indexed annually from 1st July 2024) rather than an individual caregiver’s income limit of $156,647.
- Expanding the eligibility criteria to claim paid parental leave for partners to improve their access.
- Allowing the full 20-week payment to be paid in instalments up until the child turns 2 years old rather than in 20 consecutive weeks.
- The entitlement will no longer need to be paid in full to the caregivers before they return to work.
- The ‘work test’ for DPP will be amended so that applicants may be eligible although their employment may have been interrupted by family and domestic violence, impairment due to a serious medical condition or illness, caring for an immediate family member with a serious medical condition or illness, or a natural disaster as declared by the Commonwealth or State/Territory government.
As the National Minimum wage that the entitlement is paid at will increase as of 1st July by 5.75%, the new entitlement will be $882.80 per week or $17,656 in total.
The process of applying for the entitlement remains the same, which is through an employee’s MyGov https://my.gov.au/ (Department of Human Services) account.
Suncorp insurance to backpay employees $32 million in unpaid entitlements
Suncorp Group (Ltd) has agreed to an Enforceable Undertaking (EU) with the Fair Work Ombudsman and is back paying some of its employees $32 million in unpaid wages.
The Suncorp Group includes Suncorp Staff Pty Ltd, Suncorp Insurance Services Limited and Australian Associated Motor Insurers Pty Limited (AAMI). Suncorp provides insurance, finance and banking services across Australia and New Zealand wide, employs more than 13,000 employees and holds approximately $106B in assets.
Between 2014 and 2022 more than 15,800 employees were underpaid anywhere up to $54,951, on average $1,687 per affected employee. Underpaid employees were both current and past employees in a variety of roles such as advisors, assessors, customer support, technical staff, team leaders and managers.
Entitlements such as overtime, shift loadings, weekends penalties, annual leave loading, public holiday penalties, minimum rates of pay, long service leave, redundancy pay, meal allowances, pay in lieu of notice and superannuation were all overlooked from employee wages because of incorrect interpretation and application of the Suncorp enterprise agreement. Further compounding the problem, was that employees were relied on to “claim” their appropriate entitlements through Suncorp’s self-service HR system, which would in essence require employees to understand what entitlements they were entitled to.
Rather than pay significant penalties for the error, the Ombudsman was convinced that Suncorp would take robust measures to back paying employees and prevent further underpayments in future and therefore permitted an EU for the company. The EU also requires Suncorp to contribute $520,000 to the Commonwealth Consolidated Revenue Fund.
The take-home messages of this case are twofold:
No organisation, large or small is immune from the consequences of underpaying employees, if uncovered by the Ombudsman.
All organisations large or small can unintentionally and very easily underpay their employees through very simple misapplication of the relevant industrial instrument or agreement and deficient systems of recording and administering entitlements. In the case of Suncorp, the employee self-service HR platform.
To date, Suncorp has paid back most entitlements owing to employees and is on track to back pay the remainder by September 2023.
Employee awarded $232,000 in a landmark federal age discrimination claim
The first-ever age discrimination case brought before the federal circuit court has been decided, in favour of the applicant.
In the case of Gutierrez v MUR Shipping Australia Pty Limited [2021] FedCFamC2G 56 (1 December 2021), Alex Gutierrez was the former chief accountant for MUR Shipping Pty Ltd since 2004.
According to the case, Gutierrez’s manager asked him on multiple occasions when did he intend on retiring. In one instance, in February 2018, his manager told him the company ‘policy’ required employees to retire at age 65. Under pressure, Gutierrez responded he would retire after his 70th birthday in 2019 (he was 68 at the time), despite he had planned to retire at 75.
In July of that year, MUR’s new Managing Director allegedly told Gutierrez that his permanent contract would be terminated by the end of 2018 and he would be offered a 12-month fixed-term contract of employment. On the fixed-term contract, he would be tasked with ‘training his replacement.’ Gutierrez responded that he believed the company’s actions were unlawful. Guiterrez resigned later that month and lodged a claim under the Disability Discrimination Act 1992 (Cth) that he had been wrongfully discriminated against, based on his age and suffered psychological harm as a result.
In the initial decision, Judge Driver found that MUR had in fact unlawfully discriminated against Gutierrez, but Gutierrez had not suffered any economic loss because he resigned of his own accord. On appeal, Justice Burley increase the initial damages from $20,000 to $232,000 on the basis that the psychological harm suffered by Gutierrez was understated by Judge Driver. Furthermore, Burley argued there was in fact a causal link between MUR’s unlawful conduct and Gutierrez being left with no alternative but to end his employment due to psychological injury.
The case is the first of its kind to be heard in the federal court. For complex reasons, other state tribunals and the Fair Work Commission typically are the ‘go-to’ for claims of discriminatory conduct by an employer.
Mandatory retirement age limits have long since been outlawed in states and territories Australia-wide. Nevertheless, it would seem employers still grapple with managing mature-age employees with respect to their retirement intentions and fitness for work. The consequences of mismanaging this complex issue for an employer as this case illustrates, are significant.
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