Parental leave is a legally protected right under the Fair Work Act 2009 (Cth), and Australian employers must navigate it carefully. Mishandling parental leave entitlements or unintentionally taking adverse action against employees can expose your business to serious legal and financial risk.
This employer guide, prepared by our employment lawyers explains your responsibilities, outlines common compliance mistakes, and helps ensure you’re managing parental leave lawfully and effectively.
Key Takeaways
Employees are entitled to unpaid parental leave under the Fair Work Act
Employers must not take adverse action against staff for taking or requesting leave
Breaches can lead to Fair Work Commission claims, penalties, and reputational damage
Use clear HR policies and documentation to reduce legal risk
Provide training and structured communication to support returning parents
Employer Obligations for Parental Leave Under the Fair Work Act
Who is Eligible for Parental Leave?
Under Australian employment law:
- Employees (including long-term casuals) with 12+ months of continuous service are entitled to unpaid parental leave
- This applies to the birth or adoption of a child
What Are the Entitlements?
Up to 12 months of unpaid leave, with an optional extension to 24 months
Parental leave can be shared between parents, if both are eligible
Eligible employees may receive Paid Parental Leave (PPL) via the government
You must return employees to their pre-leave position or a comparable role
To ensure your workplace practices align with current legislation, take a look at The Fair Work Act: A Guide for Employers.
What is Adverse Action in Employment Law?
Adverse action is a legal term defined in the Fair Work Act. It refers to any negative action taken against an employee for exercising a workplace right – such as taking or requesting parental leave.
Learn more in our article on What is Adverse Action?
Examples of Adverse Action Related to Parental Leave
- Dismissing or threatening to dismiss an employee for taking or requesting parental leave
- Altering an employee’s position or duties to their disadvantage after parental leave
- Discriminating between employees because of parental leave status
- Reducing hours, demoting, or withholding promotion due to parental leave
Legal Tip: Employers bear the burden of proof in these matters – you must demonstrate that any decisions were absolutely unrelated to parental leave.
For more insights on avoiding discrimination claims, our article on Pregnancy Discrimination and the Law breaks down what employers need to know.
Legal Risks of Non-Compliance with Parental Leave Law
Employers who take prohibited action can face serious consequences, including:
- Unfair dismissal claims at the Fair Work Commission
- General protections applications under the Fair Work Act
- Orders for reinstatement, compensation, or penalties
Best Practice Checklist for Employers Managing Parental Leave
To avoid adverse action claims, employers should take proactive steps to ensure their policies and conduct are compliant, consistent, and fair.
Top recommendations include:
Develop and regularly review clear parental leave policies
Train managers on obligations regarding parental leave and adverse action
Maintain open communication with employees before, during, and after parental leave
Document all discussions and decisions relating to parental leave
Avoid any conduct that could be perceived as punitive or retaliatory
Understand and accommodate ongoing family responsibilities where reasonable – our article on Employees with Parental Responsibilities explains how to meet your obligations and reduce legal risk
By following these steps, employers can demonstrate good faith, minimise legal exposure, and create a more inclusive workplace.
Real Life Example: Employee Replaced After Parental Leave
After taking 12 months of parental leave, a senior employee returned to work. She was told her position had been made redundant. However, the person covering her role temporarily had actually been kept on permanently in her role.
She reached out to Prosper Law for help. We quickly identified that the redundancy wasn’t genuine and that the situation likely amounted to adverse action.
Through strategic negotiation, we secured a suitable settlement amount for the employee – avoiding court proceedings and allowing our client to move forward with dignity and confidence.
Employer lesson: Situations like this don’t always stem from bad intentions – but even well-meaning decisions can have serious consequences if they don’t comply with employment law.
Before you make changes to an employee’s role before, during or after parental leave, it’s worth getting legal advice. It could save your business from costly claims, reputational damage, and avoidable stress.
If you’re managing a redundancy during or after parental leave, our Employer Guide to Redundancy During Parental Leave explains how to navigate the legal risks.
Employer Risk-Prevention Checklist: Parental Leave & Adverse Action
Audit past decisions: review recent redundancies, promotions, or restructures to ensure none could be perceived as linked to parental leave.
Benchmark leave practices: compare your policies with industry standards to avoid falling behind community expectations.
Neutral language in policies: ensure contracts, handbooks, and emails don’t frame parental leave as a burden or “disruption.”
Record comparator data: track how employees on parental leave are treated versus those who are not (e.g. promotion, training, performance reviews).
Proactive return-to-work planning: engage with employees before they leave to map their return, role stability, and any flexible work needs.
Third-party review: have an external HR consultant or lawyer review big restructure/termination decisions involving staff on or soon returning from leave.
Board and leadership reporting: include parental leave metrics (uptake, return rates, disputes) in governance reporting to flag risk early.
Cultural training: go beyond legal compliance and train managers to view parental leave as a business-as-usual event, not an exception.
Frequently Asked Questions
What is considered adverse action in relation to parental leave?
Adverse action includes dismissal, demotion, changing duties to the employee’s disadvantage, or treating an employee less favourably because they have taken or requested parental leave
Can an employer refuse parental leave?
Generally, no. If an employee meets eligibility requirements under the Fair Work Act, an employer cannot refuse their request for unpaid parental leave unless notice or evidence requirements are not met
Can we restructure while an employee is on parental leave?
Yes – but you must still follow correct consultation procedures and justify changes with legitimate business reasons unrelated to leave.
What if we can’t return the employee to their original role?
You must offer a comparable position. This means one of similar pay, status, and duties, or risk a breach of the Fair Work Act.
Wondering about your obligations when an employee returns from leave? Learn more in our guide to the Return to Work Guarantee and Redundancy During Parental Leave.
How can employers minimise the risk of adverse action claims?
By having clear policies, providing training to managers, maintaining transparent communication with staff, and carefully documenting all decisions related to parental leave.
About the Author
Farrah Motley
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