2025 Nov

Parental Leave and the Introduction of the Fair Work Amendment (Baby Priya’s) Act 2025

Unpaid Parental Leave Under the National Employment Standards

Under the Fair Work Act 2009, the National Employment Standards (NES) provide a minimum entitlement to unpaid parental leave. Specifically:

Employees (including those in a de facto or same-sex partner relationship) who have completed at least 12 months’ continuous service with their employer are entitled to up to 12 months of unpaid parental leave for the birth of a child, the employee’s spouse’s child, or the adoption of a child.
They may request an additional 12 months (i.e., up to 24 months total) if the employer agrees.
The leave can be taken flexibly (under specified rules) and there is a guarantee of a return to work in the same or equivalent position.
Importantly, the unpaid leave rules explicitly cover circumstances of stillbirth or the death of a child within the first 24 months. For example: “Parents who experience a stillbirth or the death of an infant during the first 24 months of life … can still take unpaid parental leave.”

Government-Funded Paid Parental Leave

On the paid side, the Australian Government administers the Paid Parental Leave Act 2010 (and associated schemes) such as Parental Leave Pay. Under this scheme:

Eligible primary carers can receive a payment (at the national minimum wage) for a period of weeks in connection with the birth or adoption of a child.
From 1 July 2025, changes mean that for children born or adopted from that date employees may receive up to 24 weeks’ Parental Leave Pay as a family.
Superannuation contributions will also be payable on Parental Leave Pay for eligible workers from July 2026 onwards (for children born/adopted from 1 July 2025) at the legislated Superannuation Guarantee rate.

Employer-Funded Paid Parental Leave

Separately and importantly, many employers (but not all) provide employer-funded paid parental leave as part of enterprise agreements, contracts, or workplace policies. This is in addition to the unpaid leave and the Government scheme. However:

The Fair Work Act does not impose a blanket legal requirement for employers to provide paid parental leave. The entitlement arises through contract, enterprise agreement, policy or other terms of employment.
Prior to the recent reform, there was a gap: although unpaid parental leave included protections for stillbirth and death of a child (e.g. an employer could not unilaterally cancel an employee’s unpaid parental leave in those circumstances), there was no equivalent statutory protection ensuring employer-funded paid parental leave could not be cancelled by the employer because the child was stillborn or died.

Why the Reform? The Case of “Baby Priya”

The impetus for the reform known as “Baby Priya’s Bill/Act” comes from a particular case: a baby named “Priya” died at just 42 days old (after being born prematurely). Her mother claimed that, after notifying her employer of the baby’s death, her employer cancelled her employer-funded paid parental leave entitlement, although the father was allowed his full leave.

Advocacy including a petition, consultation and media attention, led the Government to identify a gap in the legislation: employer-funded paid parental leave lacked explicit protection in the event of stillbirth or early death of the child.

Thus, the reform closes that gap: it aligns the treatment of employer-funded paid parental leave more closely with unpaid parental leave (which already had the protection) and with the Government’s paid parental leave scheme.

The Reform: Fair Work Amendment (Baby Priya’s) Act 2025

What the Act Does

Key features of the Bill/Act include:

The Act amends the Fair Work Act 2009 by inserting a new section under a new part to preserve employer-funded paid parental leave entitlements if a child is stillborn or dies.
The Act provides that, unless the employee has requested cancellation, an employer must not refuse to allow the employee to take employer-funded paid parental leave or cancel the leave (or part of it), because the employee’s child is stillborn or dies.
The protection only applies if the employee would have been entitled to the employer-funded paid parental leave under their terms and conditions of employment if the child had lived. That is, the leave must be one the employee is entitled to under their contract/enterprise agreement/policy (or would have been) but for the stillbirth or death.
The Bill does not require an employer to start offering paid parental leave if they currently do not provide it. The protection only applies where there is an existing entitlement (or would have been) under terms and conditions of employment.
The protection comes into effect only for stillbirths or deaths of a child on or after the date of commencement.
Penalties: Breaches of the new protection attract the same civil remedy framework under the Fair Work Act (for example, penalty units for individuals or corporations).

Why This Matters

It closes an inconsistency: Previously, employers could, in effect, cancel an employee’s employer-funded paid parental leave because the child had stillborn or died, because the law did not clearly prohibit that. Unpaid parental leave already had protection.
It provides certainty for grieving parents: whereby their employer-provided paid parental leave cannot be arbitrarily cancelled because of a stillbirth or child death, unless the employee has agreed otherwise. This is a matter of both equity and compassion.
It aligns employer-funded leave treatment more closely with the government scheme for unpaid parental leave.
It signals to employers that policies and contracts must be reviewed: employers will need to check whether their paid parental leave terms are silent or provide for cancellation in such tragic circumstances, and whether they need to adjust to ensure they comply with the new statutory minimum protection.

How This Fits Into the Broader Employer‐Funded Paid Parental Leave Landscape

Employer Obligations

Even though the Act now protects employer-funded paid parental leave in specific circumstances of stillbirth or child death, the Act does not impose a requirement that an employer provide paid parental leave in the first place. If an employer does not offer any employer-funded paid parental leave, the statutory protection is effectively moot for that employer.
Employers should examine their enterprise agreements, contracts and policies to check:
- whether paid parental leave is provided;
- whether the terms include or exclude stillbirth/infant death circumstances;
- whether the terms allow the employer to cancel leave in those circumstances;
- whether any variation after the commencement of the Act may trigger protection (i.e., an employer cannot unilaterally vary terms after commencement to avoid the protection).
Employers may still negotiate with employees about cancelling or varying leave if there is mutual agreement.

Employee Considerations

If you are an employee with a contractual entitlement (or policy/enterprise agreement) for employer-funded paid parental leave, and you unfortunately experience a stillbirth or the death of your child (on or after the commencement date), your employer cannot refuse or cancel your paid parental leave entitlement simply because of the stillbirth/child death, provided you would have been entitled under the terms.
If your employer has no paid parental leave entitlement, this reform does not create one from scratch.
You should check your employment contract or enterprise agreement for the exact paid parental leave terms and whether they address stillbirth/child death.
If an employer tries to cancel or refuse approved paid parental leave in these circumstances, you may have a right to raise the matter under the Fair Work Act civil remedy provisions (including via the Fair Work Ombudsman).

Practical Take-Aways and Commentary

For employers: Review paid parental leave clauses now. Ensure that your leave policy is consistent with the new statutory protection post-Baby Priya’s Act. If your terms have an express exclusion for stillbirth/child death you may be caught by the exception—but be aware that unilateral changes after commencement may not exclude the protection.

For employees: If you’re covered by an employer-funded paid parental leave entitlement, this reform gives you additional protection in tragic circumstances of stillbirth or infant death. Make sure you know your entitlements and liaise with HR/your employer if you foresee or face such a situation.

For the law and society: The reform is notable for addressing a gap in workplace rights relating to perinatal loss and parental bereavement. It brings greater parity between unpaid leave rights and employer-funded paid leave rights in this context.

Limits remain: The reform does not give a paid parental leave entitlement where none existed, nor does it override negotiated employer terms in good faith that already address stillbirth/child death. Employers who currently have paid parental leave entitlements that exclude stillbirth/child death may still be compliant if those terms were part of the employment contract pre-commencement—but future unilateral variations may be subject to challenge.

Conclusion

The Fair Work Amendment (Baby Priya’s) Act 2025 marks an important step in Australian workplace law: it ensures that employer-funded paid parental leave cannot be arbitrarily cancelled because of the tragic loss of a child via stillbirth or early death (for events on or after commencement). While it does not mandate paid parental leave itself, it closes a fairness and consistency gap in the parental-leave framework. Employers and employees alike should familiarise themselves with the new protections, review current policies and entitlements, and ensure that the terms of paid parental leave align with the new legislative minimum.

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