Baby Priya’s Law: New Fair Work Act Protections for Grieving Parents

Until recently, a gap in the Fair Work Act created significant hardship for grieving parents. While the Act already protected an employee’s right to unpaid parental leave after a stillbirth or infant death, it did not require employers to honour employer-funded paid parental leave in the same circumstances.

Because employer-funded paid parental leave is usually set out in contracts, enterprise agreements or workplace policies, and not within the National Employment Standards, there was no statutory protection preventing an employer from cancelling or refusing it. In practice, this meant some parents were told they could not access the paid parental leave they had planned for, simply because their baby was stillborn or died shortly after birth. The law protected unpaid leave – but not paid leave – and the inconsistency left some families without vital financial support at the most devastating time in their lives.

This gap reflected a broader structural issue: unpaid parental leave and government-funded paid parental leave are statutory entitlements, but employer-funded schemes are contractual. Without explicit legislative protection, contract law alone governed these arrangements, leaving parents vulnerable to policies that did not contemplate stillbirth or infant death. Baby Priya’s Law was introduced to close this contract-law gap and bring employer-funded leave into alignment with other parental leave protections.

Priya’s Story

Baby Priya’s Law emerged after a mother, whose daughter Priya was stillborn, was denied her employer-funded paid parental leave. Although she remained entitled to unpaid parental leave under the Fair Work Act, her employer told her that if she wanted paid leave, she would need to use her annual leave or personal leave.

Her experience exposed a major gap between the intention of parental leave laws and the lived reality of parents facing the loss of a child. Motivated to ensure no other family faced the same treatment, she started a petition calling for change. The petition attracted strong public support, and Parliament ultimately introduced and passed the amendments now known as Baby Priya’s Law.

The case struck a chord across the community because it highlighted how deeply inconsistent workplace entitlements could be, depending solely on how a particular employer’s policy was drafted. It became clear that parents should not have to rely on discretionary contract wording at a time of profound grief. Baby Priya’s Law now ensures they do not.

What the Law Changes

Baby Priya’s Law closes the long-standing gap in the Fair Work Act by creating new protections for employer-funded paid parental leave. Under the amendments, if an employee is entitled to employer-funded paid parental leave, an employer cannot refuse or cancel that entitlement because a child is stillborn or dies shortly after birth.

These changes form part of the Act’s civil remedy provisions, meaning employers face legal consequences if they fail to comply. This includes potential compensation, penalties and court orders. Importantly, the law does not require businesses to offer paid parental leave where none exists - but where an entitlement is provided, it must be honoured, subject only to limited exceptions.

The amendments align employer-funded paid parental leave with the protections that already applied to unpaid parental leave and government-funded schemes, ensuring consistency and fairness for grieving families. They also reflect the broader direction of recent Fair Work Act reforms, which have increasingly focused on improving employee protections, modernising parental leave laws and closing longstanding gaps in the workplace relations system.

Understanding the Three Types of Parental Leave

Baby Priya’s Law only affects employer-funded paid parental leave, but it sits within a broader framework of parental leave entitlements. Understanding how the three main entitlements work helps explain why the reform was necessary.

Unpaid Parental Leave (National Employment Standards)

Employees have long been entitled to unpaid parental leave following the birth of a child, including in cases of stillbirth or infant death. The Fair Work Act has recognised the significance of these events for many years, ensuring parents can take time away from work without risking their employment. These provisions were not affected by the amendments.

Government-Funded Paid Parental Leave

The government-funded scheme, available under separate legislation, has always remained accessible after a stillbirth or infant death. It operates independently of employer obligations and was not impacted by the gap in the Fair Work Act.

Employer-Funded Paid Parental Leave

Unlike the above entitlements, employer-funded paid parental leave arises from contracts, enterprise agreements or workplace policies. Until now, it had no statutory protection, and employers could legally refuse or cancel paid parental leave following a stillbirth or early infant death.

Baby Priya’s Law directly targets this gap. It requires employers to provide paid parental leave as promised, even in heartbreaking circumstances, offering parents stability and support at a time when they need it most.

How Baby Priya’s Law Fits Into Broader Fair Work Changes

Baby Priya’s Law forms part of a wider shift in Australia’s workplace laws. Over the past two years, the Fair Work Act has undergone significant reform, including changes to:

• The definition of casual employment
• The statutory test for distinguishing employees from contractors
• Wage theft and civil penalty provisions
• The right to disconnect
  labour hire and minimum standards reforms

These changes reflect a broader move toward strengthening protections, addressing historical gaps and ensuring the Fair Work Act is responsive to modern workplace challenges. Baby Priya’s Law is one example of Parliament recognising areas where the law has not kept pace with community expectations - particularly in matters involving grief, pregnancy loss and family support.

Why Employer-Funded Parental Leave Needed Statutory Protection

Legally, the need for reform stemmed from the contractual nature of employer-funded paid parental leave. Unlike unpaid parental leave or government-funded PPL, employer-funded schemes are privately created and vary widely between employers. Courts were limited to enforcing the contract as drafted; they could not read in entitlements that were not expressed, nor override clauses that excluded stillbirth or infant death.

This made employer-funded entitlements inherently vulnerable. Baby Priya’s Law resolves this by ensuring that employer-funded parental leave must be honoured in these circumstances unless a narrow exception applies. It closes what was fundamentally a contract-law gap rather than a policy oversight.

What Happens If Employers Don’t Comply?

Because the new protections form part of the Fair Work Act’s civil remedy framework, non-compliance carries real consequences. Employers who unlawfully refuse or cancel employer-funded paid parental leave may face claims for compensation, orders requiring the reinstatement of entitlements, or financial penalties.

The consequences extend beyond legal exposure. Parental leave arrangements are closely tied to organisational culture and values. Failing to comply with the new laws can undermine employee trust, damage workplace morale and expose businesses to reputational harm. Ensuring paid parental leave is managed sensitively and lawfully is an essential aspect of supporting employees through profoundly difficult circumstances.

What Employers Need to Do Now

With Baby Priya’s Law now in effect, employers should review their workplace documents and practices to ensure they comply. This includes reviewing parental leave policies, revisiting employment contracts and enterprise agreements, and updating internal processes so that paid parental leave continues uninterrupted in cases of stillbirth or infant death.

Taking these steps not only reduces legal risk, but also ensures your business is providing meaningful and compassionate support to employees during an unimaginably difficult time. If you’re unsure whether your current policies or contracts meet the new requirements, it’s a good idea to seek legal guidance to make sure everything is properly aligned with the Fair Work Act.

​​Key Takeaways

• The Fair Work Act previously protected unpaid parental leave after a stillbirth or infant death, but did not require employers to honour employer-funded paid parental leave in the same circumstances.
  
• Because employer-funded paid parental leave is a contractual benefit, not part of the National Employment Standards, some employers lawfully refused or cancelled it before the amendments.
  
• Baby Priya’s Law was introduced after a mother was denied paid parental leave following the stillbirth of her daughter, prompting widespread public support for reform.
  
• The amendments now prohibit employers from refusing or cancelling employer-funded paid parental leave because a child is stillborn or dies shortly after birth.
  
• These protections form part of the Fair Work Act’s civil remedy framework, meaning non-compliance can lead to penalties, compensation orders and other court-imposed consequences.
  
• The reform aligns employer-funded paid parental leave with existing protections for unpaid leave and government-funded paid leave, ensuring consistency for grieving parents.
  
• Employers should review and update contracts and policies to ensure they comply with the new laws and support affected employees sensitively and lawfully.
  
• Baby Priya’s Law forms part of a broader modernisation of the Fair Work Act, alongside recent changes to casual employment, wage theft provisions, contractor definitions and the right to disconnect.
  

Conclusion

Baby Priya’s Law represents an important and compassionate step forward in Australia’s workplace relations landscape. By closing a long-overlooked gap in the Fair Work Act, the reforms ensure that grieving parents are not further disadvantaged by the sudden loss of employer-funded paid parental leave. For employers, the amendments reinforce the need for clear, compliant and empathetic parental leave frameworks. As broader Fair Work reforms continue to reshape employment obligations, aligning workplace practices with both the letter and the spirit of the law will remain essential in building supportive, modern and resilient workplaces.

If you would like a consultation on compliance with Fair Work laws, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.