"Parliament's passing of the Paid Parental Leave Amendment (Improvement for Families and Gender Equality) Act 2023 introduces significant changes to the Government's paid parental leave scheme to financially support new parents in caring for infant children while being absent from work.

The Bill will support greater gender equality in both the home and in the workplace, by creating more opportunities for infant bonding and care with parents who are not the birth parent. It will also facilitate an economic imperative of sustainable workforce participation by parents," Innes Willox, Chief Executive of the national employer association Ai Group, said.

"Among other changes, the Act removes the current 30-day cap on the number of individual days of leave that can be paid under the scheme. It lets employees access payments when they take parental leave in a more flexible manner than the traditional approach of taking a block of continuous unpaid leave.

"The changes are to be commended. But it is important to appreciate that the Bill only deals with financial support for employees. It doesn't change the rules around when an employee can actually take parental leave under the Fair Work Act.

"The passage of the legislation raises the question of whether the Fair Work Act should now be amended to align the rules around taking parental leave with the more flexible approach adopted under the paid leave scheme. The Government has previously announced an intent to strengthen employee access to parental leave in the next tranche of IR reforms.

"While measures to support working parents are crucial and are supported by industry, it is vital that any further changes to expand employee entitlements to take parental leave are implemented in a balanced way. Any additional changes need to ensure employers are able to plan their operations and workforce around parental leave absences taken as multiple periods and/or single day absences.

"As raised in Ai Group's submission in response to the Bill, if employee rights to access parental leave in a more flexible manner are enhanced, it is essential that this is accompanied by sensible and practical requirements that ensure employees provide advance notice that they want to take their leave in a flexible manner.

"Australia's parental leave laws need to be workable for working parents, their co-workers and employers.

"We need to make it easier for parents to take their leave while also promoting a co-operative approach to such matters at the workplace. If a balanced approach to the implementation of any further changes to parental leave laws isn't adopted, the changes to Government-funded parental leave may ultimately prove very difficult for employers to manage," Mr Willox said.