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Parental Leave and Employment Protection Bill

Hon. Laila Harre
December 13 2001 Speech Notes

First reading - Parental Leave and Employment Protection (Paid Parental Leave) Amendment Bill

I move, that the Parental Leave and Employment Protection (Paid Parental Leave) Amendment Bill be now read a first time. At the end of this debate I will move that the Bill be referred to the Social Services Committee, and that the Committee report back to the House by [14 March 2002].

This Bill recognises the phenomenal change that has taken place in the make-up of the paid workforce over the past fifty years.

The biggest change is the massive increase in women’s workforce participation. And especially that of mothers.

Fifty years ago our society was structured around a division of labour between men and women. Men in full-time secure paid employment earning a wage sufficient to support a family. Women in full-time secure unpaid employment as mothers and wives, community volunteers and the carers of the extended family’s elderly. And the living standard of all bolstered by a substantial social wage – including free healthcare and education and a universal family benefit.

Fifty years later the social wage has been deeply eroded, Dad’s wage is no longer sufficient on its own to raise a family, sole parent families are common, a much larger workforce is needed to maintain economic growth, and – surprise – women have discovered that they are good at lots of things as well as parenting and are setting about doing them.

By the 1996 census a third of the mothers of babies under one, half of the mothers of pre-schoolers and three-quarters of the mothers of teenagers were in paid employment.

That is a massive change.

That increased participation has had huge benefits.

But it also carries costs. And the costs of mothers’ paid work has largely been borne by them individually through reduced incomes, high direct costs – for childcare especially, the gender pay gap, and the lack of workplace systems that facilitate caring for children and career advancement at the same time. The result? Women are concentrated in low paid insecure jobs and mothers end up amongst the poorest adults in our society.

In simple terms this Bill says it’s not fair to charge mothers more to work than other people, and begins the process of sharing some of that cost more fairly.

One of the most obvious costs faced by mothers in paid employment is the essential leave required from work in the weeks or months following the birth of a baby.

While New Zealand law protects the jobs of those on parental leave, to date mothers have had to rely on employer goodwill or their own negotiating power to achieve any payment for any part of that leave.

This contrasts with other forms of leave provided in law. Annual leave, public holidays and sickness are paid. Accident Leave – including non-work accidents for instance (and commonly) on rugby fields– is provided for through a comprehensive social insurance scheme – ACC - is unlimited in length, and is funded at 80 per cent of earnings. Men and women are equally liable for ACC premiums, but men are paid out the lion’s share of compensation.

That is the nature of social insurance – it recognises that the whole of society benefits from support for workers during periods when they can’t work or are taking statutory leave from work. Paid parental leave recognises that for our new workforce of mothers, childbirth requires time off work, and should be treated similarly to other periods of time of work for essential reasons. That is, it should be paid.

The Bill provides 12 weeks paid parental leave for new mothers entitled to unpaid leave under the existing Parental Leave and Employment Protection Act of 1987.

The payments are state funded and begin on the same day as the maternity or parental leave. Mothers can transfer all or part of their entitlement to payment to their spouse or partner, if he or she is also eligible for parental leave under the Act.

The Bill extends the definition of an “employee” in the principal Act to include homeworkers and the definition of “spouse” to include same sex partners.

In adoption situations, where physical recovery is not an issue, eligible parents who are jointly adopting a child under five years old may nominate either parent as the spouse who will be primarily entitled to the parental leave payment.

This Bill represents the first stage of Government policy for paid parental leave. It will have an annual cost of around $57 million, around $40 million of which is new expenditure.

Having agreed on the total amount available for the first stage of the paid parental leave scheme, the bill is carefully designed to ensure that low income women have the greatest proportion of their incomes replaced during the 12 weeks.

At the same time this is not a means tested scheme. All women in paid employment lose money when they take leave from their jobs to have babies.

The payment will fully replace the first $325 of a person’s ordinary gross earnings.

For many low paid women this will mean no wages are lost by taking 12 weeks off to be with their babies. Many of these women are now returning to work within a few days or weeks of their babies’ births because they just can’t afford to stay home. This is one reason for a declining breastfeeding rate – especially by Pacific mothers who once surpassed all others in their commitment to breastfeeding.

Poor breastfeeding rates are indicators of poor maternal and child health. That is socially and financially costly.

This maximum payment rate will be adjusted annually in line with average earnings. The bill also provides for greater increases in the payment by regulation – a possibility after the first year of the operation of the scheme.

The bill tidies up the eligibility criteria for parental leave under the principal Act so that people with odd hours of work are not disadvantaged. The 10 hour per week threshold for qualifying for leave will be amended to include those working fluctuating hours, or with job share or rostering or on-call arrangements..

People on paid parental leave will continue to have access to social assistance, including family assistance provided under the Income Tax Act, except that those eligible for the Parental Tax Credit will have to choose between that and paid parental leave.

Where employment agreements include some form of payment those will continue also. Employers and employees are free to negotiate new agreements relating to payment.

The payment cannot be paid in respect of a period when the employee has returned to work, but continue until the mother returns to work if the baby is miscarried, or dies, or is given for adoption. If the mother dies, or loses legal guardianship, a spouse who also meets the eligibility criteria for parental leave can succeed to the payment.

The Bill further extends the principal Act to enable Labour Inspectors to act for employees to enforce their rights under the Act

For employers this Bill is good news. It imposes negligible costs on them as the paper work required will be essentially the same as under the existing law.

On the other hand, the benefits in terms of the likely increase in the uptake of leave – rather than the practice of resigning from employment at the time of the baby’s birth – will bring savings for employers in the costs of recruiting and training staff.

I strongly encourage employers to consider how they can complement the state scheme with additional measures – financial or simply organisational – to assist their staff around this time - thereby improving their attachment to the job and the likelihood of returning to it.

Organisations such as the government and employer funded Equal Employment Opportunities Trust are already providing advice to employers on how best to achieve this.

The new provisions will cover those whose baby is expected on or after 1 July 2002, or whose baby is born or adopted on or after 1 July. This includes employees who are already on parental leave at 1 July (for example, if they started leave early under the provisions of the principal Act).

This Bill has many midwives – and I acknowledge them all for their commitment to mothers, babies and families. When I introduced my earlier bill on this matter I predicted that we would have paid parental leave within 5 years. And we will.


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