Baby Priya’s law: changes to employer-funded paid parental leave

Understanding an employee’s entitlement to parental leave can be challenging, given that there are three types of parental leave in Australia:

1. unpaid parental leave under the Fair Work Act 2009 (Cth) (FW Act);
2. paid parental leave under the Australian government’s Paid Parental Leave Act 2010 (PPL Act); and
3. employer-funded paid parental leave (which isn’t compulsory in Australia).

In recent years, there have been changes under both the FW Act and the PPL Act with respect to parental leave, namely to move away from language such as ‘primary carer’ and “secondary carer,’ which conveys that responsibilities for children are unfairly divided. The new legislative language now uses neutral terms such as ‘parent’ or ‘family’.

There have recently been further changes to parental leave, specifically with employer-funded paid parental leave. These changes were introduced by the Fair Work Amendment (Baby Priya’s) Act 2025 (Cth) (Baby Priya’s Act) and took effect from 7 November 2025.

Who was Baby Priya?

Baby Priya was born prematurely in June 2024 at just 25 weeks old. Sadly, she lived for only 42 days. Baby Priya’s mother had worked for her employer for 11 years and had access to her company’s employer-funded paid parental leave. However, after Baby Priya’s death, her employer cancelled her pre-approved employer-funded paid parental leave. Her company instead permitted her a month of personal leave.

Baby Priya’s parents petitioned for legislative change to ensure that employers could deny employer-funded paid parental leave in the circumstances of stillbirth or infant loss, only if the employer’s policies expressly provided that employer-funded paid parental leave did not apply in circumstances of stillbirth or infant loss.

The petition for legislative change was successful.

What are the changes?

Preservation of employer-funded paid parental leave

The FW Act has been varied to preserve employer-funded paid parental leave if:

1. a child is stillborn or dies; and
2. an employee would have been entitled to leave, under the terms and conditions of the employee’s employment, if the child had not been stillborn or died; and
3. that leave is paid for by the employee’s employer and is associated with:
   1. the birth of a child of the employee or the employee’s spouse or de facto partner; or
   2. the placement of a child with the employee for adoption.

The employee’s employer must not, because of the stillbirth or death:

• refuse to allow the employee to take the employer-funded paid parental leave; or
• cancel any part of that leave without being requested by the employee to do so.

This means that employers who refuse or cancel employer-funded paid parental leave for an employee because that employee’s child is stillborn or dies would be in contravention of their obligations under the FW Act and could face civil penalties:

• serious contravention – 600 penalty units; or
• otherwise – 60 penalty units.

What are the exceptions?

The protections do not apply if certain exceptions apply, including if the parental leave policy expressly provides that the employer-funded paid parental leave can be cancelled in instances of stillbirth or death of the child. A more detailed overview of the exceptions is set out below.

1. Exception: express provision for refusal or cancellation of leave, or for no entitlement to leave

Detail

The employer may refuse or cancel the employer-funded paid parental leave if, under the terms and conditions of the employee’s employment:

• the employer is expressly allowed to refuse or cancel that leave because of stillbirth or the death of a child; or
• the employee is expressly not entitled to that leave because of stillbirth or the death of a child.

Note

This exception does not apply if the terms and conditions are varied, after the Commencement Date*, unilaterally by the employer to provide that:

• the employer is expressly allowed to refuse or cancel that leave because of stillbirth or the death of a child; or
• the employee is expressly not entitled to that leave because of stillbirth or the death of a child.

2. Exception: other leave that expressly addresses circumstance

Detail

The employer may refuse or cancel the employer-funded paid parental leave if, under the terms and conditions of the employee’s employment, the employee is entitled to other leave that expressly addresses stillbirth or the death of a child.

Note

When working out whether this exception applies, the employer must disregard an employee’s entitlement to compassionate leave or unpaid parental leave under the National Employment Standards (NES), or an entitlement under their terms and conditions of employment with the same or substantially the same effect as those NES entitlements.

*Commencement Date is 7 November 2025.

What does this mean for employers?

Employers should review their current employer-funded parental leave policies to ensure that:

1. it reflects any recent changes to parental leave made under the FW Act or PPL Act; and
2. expressly provides for an employee’s entitlements (whatever they may be) in circumstances of stillbirth or the death of a child.

If any of this information has raised questions about changes to paid parental leave or if you have another workplace matter that you need assistance with, please reach out to our Citation Legal team for a confidential discussion.

This article was written by Clinton Tomeldan, Solicitor and Lisa Qiu, Partner, Citation Legal.