Are casual employees eligible for paid maternity or paternity leave?

Casual employees often miss out on some of the benefits that part-time and full-time employees enjoy, and concerns can arise especially when the employee is about to become a parent. Some casual employees may wonder if not only are they entitled to maternity or paternity leave in the first place, but will they also be entitled to be paid during leave?

There are two main Acts that provide entitlements for paternity and maternity leave and pay, being: the Fair Work Act 2009 (the FWA) and the Paid Parental Leave Act 2010 (the PPL Act). Expectant parents who are casual employees will understandably hold concerns about the eligibility requirements regarding parental leave and pay, and hopefully this piece can shed some light on the matter.

Who is a casual employee?

Before further exploring the eligibility requirements for casual employees in regards to unpaid parental leave, we should first determine: Who is a casual employee? Well, believe it or not there is no set definition of what constitutes casual employment. However, case law has put forward the view that a casual employee may involve a.. informality, uncertainty, and irregularity of an engagement that gives it the characteristic of being casual as was suggested in Reed v Blue Line Cruises Ltd (1996) 73 IR 420.

There is no definition in the FWA of what is casual employment, and the High Court in Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545 has also said there is no set meaning. However, a commonly accepted definition can be found in Australian Communication Exchange v Deputy Commissioner of Taxation (2003) 53 ATR 834; 201 ALR:

A casual employee shall mean an employee who is engaged by the hour and who may terminate employment or be discharged at any moment without notice.

Eligibility for unpaid maternity or paternity leave under the Fair Work Act

In order for casual employees to be eligible for unpaid parental leave, they must satisfy the following criteria under s 67 of the FWA:

• the employee is, or will be, a long term casual employee of the employer immediately before the date, or expected date, of birth or placement of the child, or the date on which the employee’s leave is to start; or
• but for the birth or placement of the child, or the taking of the leave, the employee would have had a reasonable expectation of continuing employment with the employer on a regular and systematic basis.

As many readers may have noted, unpaid maternity or paternity leave is only available to long term casual employees, which means that the employee must have been employed on a regular and systematic basis during a period of at least 12 months, as outlined under s 12 of the FWA.

Similar to the definition of casual employee, there is no formulaic approach to employment on a regular and systematic basis. However, case law regarding the matter has stated that the work must be regular and systematic, rather than specifically looking to the hours and the days of work. Therefore, a defined pattern of rostered hours may be a strong indicator of regular and systematic employment, along with the offer to the employee to undertake work – and regular acceptance of available work by the employee, may also be considered as evidence of regular and systematic employment, as was noted in Ponce v DJT Staff Management Services Pty Ltd [2010] FWA 2078.

Eligibility for paid maternity or paternity leave under the Paid Parental Leave Act

In terms of eligibility for paid maternity or paternity leave, under s 35 of the PPL Act, only requires that a person performs paid work. Therefore, a person who works for a company for remuneration will be eligible, or if the person is self-employed, the work performed for a business which is carried for profit and controlled by the person will also generally fulfil the eligibility requirements.

However, under s 31 of the PPL Act, a primary claimant must also:

• Satisfy the work test: within the 13 months prior to the birth or placement of a child, they must have completed at least 330 hours of work in a consecutive 10 month period.
• Satisfy the income test: a person satisfies the income test if their adjustable income for the relevant financial year is no more than the PPL income limit, which currently stands at $150,000 at the time of writing (November, 2012).
• Satisfy the Australian residency test: a person satisfies the residency test: if they are an Australian resident; a special category visa holder residing in Australia; is the holder of a visa determined by the Minister for the purposes of s 729(2)(f)(v) of the Social Security Act 1991 (Cth); and either the person is in Australia, or the person is temporarily absent from Australia for no more than 13 weeks and the absence is in relation to a special benefit under the Social Security Act 1991. It should also be noted that a person may not satisfy the Australian residency test if at the time the paid parental leave claim is made, they have been absent from the country for more than three years.
• Be the primary carer of the child: a person will be considered as the primary carer if the child is in the person’s care during that period, and the person meets the child’s physical needs more than anyone else during that period. Additionally for the most part, only one person can be a child’s primary carer on any given day.
• Have not returned to work: a person will be deemed to have returned to work on a day on or after the birth or placement of a child if, on that day, the person performs one hour or more of paid work. However, defence force members and law enforcement officers are allowed up to 10 hours of keeping in touch days, which will not count as return to work, therefore, not disentitling the person from the benefit. For other employees, if the purpose for the day is to allow the person to keep in touch with their employment which will assist in the person’s return to work at the conclusion of the leave period – such a day will be considered as a keeping in touch day. However, for the day to be considered as a keeping in touch day, both the employer and employee must agree to the day, and it must not occur within 14 days of the child’s birth or placement. A person who is self-employed may be allowed to oversee their business and perform the occasional administrative task for business purposes without the work counting as a return to work. However, you should always check with your lawyer to get clarity of the situation.
• Not be entitled to the baby bonus, have a partner or ex-partner who is, or was, entitled to the baby bonus in relation to the child.

For a child who is adopted, the eligibility requirements are similar to the eligibility requirements for a birth of a child. The only really differentiator is that for a parent to be eligible for paid leave in regards to an adopted child – the child must be under the age of 16 at the date of placement (s 275(2)).

This is only a general introduction to maternity or paternity leave and pay. If you have any questions or concerns, please seek the help of a lawyer.