Fair Work Amendment (Baby Priya’s) Bill 2025 and employer funded parental leave changes

From November 2025, employers can no longer cancel or refuse employer funded paid parental leave if an employee’s baby is stillborn or dies.

These changes come under the Fair Work Amendment Bill 2025 and introduce stronger protections for employees during one of the most distressing experiences a family can face.

The focus is specifically on employer funded parental leave, not government funded entitlements under the National Employment Standards (NES).

For Australian employers, this is a compliance shift that requires careful review of workplace documents and internal processes.

Baby Priya’s Bill amends the Fair Work Act to prevent employers from cancelling or refusing paid parental leave that they fund themselves when a baby is stillborn or passes away.

This means that where parental leave is provided as part of employment conditions, the employee is entitled to continue accessing that leave, regardless of the tragic outcome.

It is important to distinguish between employer funded parental leave and the government funded NES.

Employer funded parental leave is provided under:

• an employment contract
• a workplace policy that forms part of the contract
• an enterprise agreement

NES parental leave is unpaid leave supported by the government’s Paid Parental Leave scheme and administered through Services Australia. These Fair Work changes do not impact NES entitlements, which already allow employees to remain on parental leave where a baby is stillborn or dies.

The new legislation only affects paid parental leave that is directly funded by the employer.

Yes, if a small business offers employer funded parental leave as part of its employment conditions, it must comply with the new rules.

If no such leave is offered, the changes will not apply. However, any business considering introducing employer funded parental leave in future must ensure all documentation aligns with the updated Fair Work requirements.

Recent changes mean employers must make sure their contracts and policies handle paid parental leave lawfully and compassionately, especially in cases of stillbirth or infant death.

Employers providing ‘employer funded parental leave’ should:

• Review the relevant document/s that outlines the conditions of the paid parental leave, to determine what your obligations are under the new parental leave laws (see below)
• Review and ensure leave procedures comply with these obligations
• Ensure managers, HR and payroll understand the new requirements

How to check your documents

1. Look at the contract, policy or enterprise agreement that covers paid parental leave.

2. Check what it says:
   A. If it clearly allowed refusal or cancellation before 7 November, you’re exempt from the change.
   B. If it provides another type of leave in these situations (and it isn’t an NES entitlement), you’re also exempt.
   C. If it doesn’t expressly allow refusal or cancellation, or the wording was added after 7 November, the new rules apply — and you cannot amend the document to create a right of refusal. Changes made now won’t have any effect and penalties can apply.

3. If you fall into category C, ensure managers, HR and payroll understand the new requirements and update internal processes so leave is managed lawfully and compassionately.

The new protections do not apply if:

• the business does not offer employer funded parental leave
• the right to refuse or cancel leave already existed in contracts, policies or enterprise agreements before 7 November 2025

Additional limitations include:

• existing agreements cannot be amended after 7 November 2025 to introduce cancellation rights
• the protection does not apply where the employee would access an alternative form of leave that is not already an NES entitlement

If you are unsure whether your contracts or policies meet current Fair Work requirements, a professional review can help clarify risk and ensure your business responds with clarity, care and compliance.