Paid maternity leave in Australia: HREOC’s Valuing Parenthood

Marian Baird, University of Sydney

Just twelve months ago paid maternity leave was a twinkle (perhaps a gleam) in the eyes of some activists and policy makers in Australia and was barely on the policy agenda. The recent release of Valuing Parenthood, Options for Paid Maternity Leave: Interim Paper 2002 by the Human Rights and Equal Opportunities Commission (HREOC) has been useful in finally putting paid maternity leave in the public domain and political debate.

It is about time that all, not just a lucky minority, of Australian working women have access to paid maternity leave and it is an embarrassment that it has taken us so long to get to this point. Now that the HREOC paper has been released we must ensure that the debate remains focused on the provision of paid maternity leave as a right for all working women. The issues of entitlement, duration and funding must then be addressed in order to achieve this agreed goal. At present there is a danger that discussion of the details will fragment the debate and delay implementation.

The Context of the Debate

A confluence of international, national, and enterprise level factors have drawn attention to Australia’s lack of mandated paid maternity leave, and prompted the Human Rights Commission to produce this paper.

In 2000 the International Labour Organisation (ILO) revised the Maternity Protection Convention (ILO C103), recommending fourteen weeks paid leave (ILO C183), two weeks longer than the standard set in 1952. Along with the United States and New Zealand, the Australian government refused to ratify the Convention. Considerable criticism and heightened public awareness ensued, but the Australian government did not move on the issue. Instead, they argued that in the spirit of the Workplace Relations legislation, paid maternity leave was best left to the employer and employee to resolve through negotiation or managerial prerogative. Meanwhile, across the Tasman, the Labour and Alliance Government have introduced paid parental leave, effective from 1 July 2002.

In the Australian industrial relations system, workers gain paid maternity leave by award or in enterprise bargaining. However, not all awards include provisions for paid maternity leave, and some of those previously providing for it do so no longer (Baird, 1999). Enterprise bargaining is producing highly variable results, ranging from the good, through to the bad and the ugly (Baird, 2002). During 2001, the Australian Catholic University introduced twelve months paid maternity leave (twelve weeks on full pay and 40 weeks on 60 per cent salary), and the Municipal Employees Union achieved nine weeks paid leave for New South Wales local government employees, giving them parity with those employed by the state government. On the other hand, Sydney City Council used paid maternity leave as a bargaining lever to draw concessions from the employees and introduce competitive tendering for all jobs.

Just twelve months ago paid maternity leave was barely on the policy agenda.

In the lead up to the 2002 Federal election, the Australian Democrats and the National Pay Equity Coalition developed concrete proposals for a paid maternity leave scheme, but the Australian Labor Party (ALP) and the Liberal-National Coalition remained silent on the matter. Since the election, the ALP has committed in principle to paid maternity leave. The Coalition’s response to the mounting social debate was to introduce the First Child Tax Rebate scheme, (the ‘Baby Bonus’), which has been heavily criticised for as a regressive measure that effectively penalises women for returning to work (see for example Apps, 2001). Despite criticisms, the scheme came into effect in Budget 2002–03. Women’s increasing participation in the paid workforce, the rising tension of combining work and family, and growing concern about Australia’s declining fertility rate also fed into the paid maternity leave debate.

Since Federation, responsibility for determining and providing welfare maternity payments in Australia has shifted from the government to the bargaining table to the business boardroom, and this is not adequate (Baird, Brennan and Cutcher, 2001). Further, the comprehensive provision of paid maternity leave will not fare well while the philosophy of market-place rule that has dominated Australian policy-making for the last decade.

HREOC’s Findings

In 2001 the Human Rights and Equal Opportunities Commission undertook to inform the debate building about paid maternity leave in Australia. On Thursday 18 April 2002, the Commission launched a discussion paper, Valuing Parenthood, canvassing the available data and research, considering the international models, and outlining five different options for Australia. Importantly, Valuing Parenthood recognises the changing structure and dynamics of Australian society, and strongly favours the adoption of some form of universally accessible paid maternity leave scheme. However, the paper lacks costings of the various models, with HREOC relying on the Federal Government to provide this data.

From the outset, Valuing Parenting shows some astute thinking by the authors. Although it refers to ‘parenting’, the central thrust of the paper is actually about the lack of paid maternity leave for women in the workforce. There are good reasons for doing so. The roles of bearing and caring for children still fall primarily to women, yet a social revolution has seen women confronting many additional life transitions and challenges, including education, paid work, travel and housing. Paid maternity leave, it is argued, is one way of assisting women to combine these roles and meet these challenges. Other objectives of paid maternity leave include addressing declining birth rates, providing the time and means to ensure the health and well-being of women and babies at the time of birth, and delivering economic security for women at a crucial stage in their lives and careers. This position is supported by reference to the two important international conventions, ILO C183 and the Convention on the Elimination of All Forms of Discrimination against Women, which both advocate paid leave in order to enable women to keep their attachment to the labour market.

Almost all of our major trading partners already provide paid maternity leave.

The HREOC paper synthesises the data currently available about the extent and coverage of current maternity leave arrangements in Australia, confirming what we already know: that it is not widely available. The paper also notes that there is an absence of information about important aspects such as numbers of births to women in the workforce, eligibility criteria, the take-up rate, and specific company policies. Current government payments to families are also summarised, with HREOC arguing that these still fall short of income protection and ‘do not constitute paid maternity leave’ (HREOC, p. 26).

Foreshadowing the arguments that, for competitive reasons, neither Australia nor business can afford such a scheme, the paper shows that with the exception of the United States, all of Australia’s major trading partners and all members of the OECD already provide paid maternity leave. While the paper is neutral about the preferred means of funding paid maternity leave, it is all too aware of the potential for opposition from small business. The comparison of international models shows the various permutations of paid maternity leave schemes, and thus the options from which Australia can learn.

Issues Outstanding

Valuing Parenthood provides a useful summary of the research currently available, but its success will be gauged by the discussion it generates about real options for paid maternity leave in Australia. For Australia to move forward, four clear questions have to be answered. Who should be eligible? What should be the duration of the leave? How much should we pay? How should the scheme be funded?

Eligibility

Under federal industrial relations legislation, all permanent employees have been eligible for unpaid parental leave since 1994. In 2002 this was extended to casual employees. (Previously, in 1996 and 1999, NSW and Queensland respectively had extended their legislation to cover casual employees.) One of the most significant problems of the current regime in Australia is that paid maternity leave is available to only a small proportion of the female workforce. The exact figure is not known, but estimates have approximately only one-quarter to one-third of the female workforce eligible. As the HREOC paper notes, however, the take-up rate remains unknown, as do the impediments preventing women making full use of their entitlements. Anecdotal reports suggest that factors such as company culture, lack of information, and limited child care on return to work impede women’s use of paid maternity leave, even where it is available. Further, Australia’s female workforce is highly segmented, heavily casualised, or in part-time employment, all of which are known to reduce a female employee’s entitlement to paid maternity leave. Finally, should the woman who chooses not to return to the paid workforce be eligible for paid maternity leave? To avoid further inequities, any model that Australia adopts needs to ensure that in broad terms, all working women are eligible for paid maternity leave.

Duration

Very little is known about how much women on paid maternity leave in Australia currently receive.

The duration of paid maternity leave currently available in Australian enterprise agreements varies widely from two days to eighteen weeks. The notable and recent exception is the Australian Catholic University’s agreement to provide twelve weeks full pay and 40 weeks at 60 per cent of salary for female staff who have completed two years continuous service and who return for a period of 26 weeks. The fourteen weeks recommended by the ILO is available in only a handful of federal agreements, while legislation for Commonwealth public servants provides for twelve weeks. The most common period negotiated in federal agreements is two weeks; in state agreements, six weeks (Baird, Brennan and Cutcher, 2001). Legislation at the state levels also varies, from twelve weeks in Victoria and Northern Territory, nine weeks in New South Wales and two weeks in South Australia.

The duration of paid maternity leave in other countries seems to be determined by a combination of rationales, the primary ones being concern for the health and well being of the mother and child, and the duration of leave in comparator countries. The most obvious benchmarks for Australia are:

  • twelve weeks, as recommended by the ILO 1952 convention (this is the standard New Zealand has adopted)

  • fourteen weeks, as per the ILO 2000 convention

  • sixteen weeks, as per the World Health Organisation recommendation based on four months needed to establish breast-feeding

  • eighteen weeks, as the amount of time the ILO encourages states to move towards

  • 26 weeks, as per the standard recently endorsed in the United Kingdom.

Pay

Very little is known about how much women on paid maternity leave in Australia currently receive, and the HREOC report adds little. Some employers in Australia provide for full income replacement, some provide full pay for a proportion of time, and then a reduced amount for the balance of the leave. In some cases the pay is contingent on return to work. If considered as income, a further consideration is whether or not the amount should be taxed.

The HREOC paper does provide a useful summary of pay rates provided in other countries. Based on this knowledge, the options appear to include:

  • full income replacement

  • a proportion of previous earnings

  • average weekly earnings

  • minimum weekly earnings

  • some other amount, for example, unemployment benefits.

Though there is growing support for paid maternity leave, there is disagreement over its funding.

A guiding philosophy for paid maternity leave is required if a rational decision is to be made. If providing women with paid maternity leave is regarded as a welfare measure provided by the state, then a small amount comparable with other welfare payments may be justified. If the philosophy is to satisfy women’s demands for some income, then an amount equivalent to average weekly earnings or minimum weekly earnings may suffice. However, if paid maternity leave is driven by a desire to improve women’s economic independence and to redress the cost of career interruptions, then full income replacement is warranted.

Funding source

Even though there is growing community support and in-principle agreement that paid maternity leave should be introduced, there is disagreement about the funding. In particular, there is the argument that small business cannot afford paid maternity leave and that if introduced women will, as a result, be discriminated against in employment. At this stage, aside from the argument being unacceptable, it has not been tested.

Valuing Parenthood provides a summary of how other countries fund their schemes. In some countries, employers fund maternity leave, directly or through a levy administered by the government. In others, employees fund the leave themselves, as is current practice in Australia, or through as an insurance style scheme. Another option is government funding using tax revenue. Combination schemes are also possible. Ultimately, whether made explicit or not, preferences for models will be based on philosophical positions about the role of women in society and the perceived responsibilities of government, business, and individuals.

Based on the fundamental principles of providing equal economic opportunity for women and the social importance of maternity, the requirements of a paid maternity leave model become clearer. It must provide as high a level of income replacement as possible. And because the advantages also accrue to society and business, they should also fund paid maternity leave.

Other considerations

Resolving the eligibility criteria, the duration, the pay level, and source of funding are major issues, but there are other important questions to be settled. From when would the scheme become operational? Australian working women have already been denied paid maternity leave for too long, so it is imperative that this issue be treated with urgency and commitment by the current federal government and by the other political parties. The Democrats’ recent tabling of a paid maternity leave bill is a very useful strategy. Second, how is paid maternity leave to be integrated with current arrangements? Existing schemes such as the ‘Baby Bonus’ and their relationship with paid maternity leave will need review. Finally, consideration needs to be given to existing arrangements including state level legislation, awards and enterprise agreements and the twelve month unpaid period now available under the Workplace Relations Act.

Conclusion

The HREOC paper provides the framework for formal, public debate about the introduction of paid maternity leave for Australia’s working women. It is clear that Sex Discrimination Commissioner Pru Goward (through HREOC) is committed to moving forward from here. With this in mind and using submissions from stakeholders, HREOC plans to offer fully developed options for paid maternity leave in a paper to be released later in 2002.

It will be immensely disappointing if Australia cannot introduce a scheme that at the very least, provides working women with a guaranteed fourteen weeks paid maternity leave at least at minimum weekly earnings. This duration accords with the ILO recommendation, and the pay level enables employers, unions, and employees to negotiate above this amount if desirable. HREOC’s release of the discussion paper has signified the formal arrival of paid maternity on the nation’s agenda. It should be difficult for the government, political parties, employers, unions, and the public to walk away from the issue now. Paid maternity leave must be discussed seriously, and without contamination from competing arguments about birth rates and global competition. If we stick to the principle that paid maternity leave is a key aspect of providing equal economic opportunity for women then we can work out the details to suit and provide paid maternity leave as a right for all Australian working women.

REFERENCES

Apps, P. 2001, ‘The First Child Tax Refund’, The Drawing Board, Digest, 5 Nov.

Baird, M. 2002, ‘Paid Maternity Leave in the Australian Industrial Relations Framework’, Inter-jurisdictional Workshop, Australia and New Zealand, Conference on Work and Family, Conference of Ministers for the Office of the Status of Women, The Department of Prime Minister and Cabinet, March 25.

Baird, M., Brennan, D. and Cutcher, L. 2001, Paid Maternity Leave in Australia: A Pregnant Pause? Labour Studies Seminar Series, University of Sydney, 15 May.

Baird, M. 1999, ‘The Removal of Paid Maternity Leave, One Consequence of Award Simplification’, AIRAANZ Review, 1:1.

HREOC 2002, Valuing Parenthood, Options for Paid Maternity Leave: Interim Paper, Human Rights and Equal Opportunity Commission, Sydney, April.

ILO C183 2000, Maternity Protection Convention, International Labour Organisation. [Online] Available: http://ilolex.ilo.ch:1567/ [2002, June 13].

Dr. Marian Baird lectures in industrial relations and human resource management in the Discipline of Work and Organisational Studies at The University of Sydney. She has been researching the implications of enterprise bargaining on paid maternity leave in Australia. Her other research projects include industrial relations at ‘greenfield sites’ and in high commitment work systems.

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