From 7 November this year, new protections have been applied to employer-funded paid parental leave to cover tragic situations.

Known as "Baby Priya's Law", the new legislation protects employees in the event of stillbirth or infant death. The changes to the Fair Work Act ensure that employees planning to take, or who are receiving, employer-funded paid parental leave can’t have this leave refused or cancelled if their child is stillborn or dies.

An Overview of Baby Priya's Law

The Fair Work Amendment (Baby Priya’s) Act 2025 introduces new protections for employees who plan to take, or are already on, employer-funded paid parental leave.

The Fair Work Act has been changed to prohibit an employer from refusing or cancelling employer-funded paid parental leave for an employee because that employee’s child is stillborn or dies. This applies if both:

• the employee would have been entitled to the leave under their terms and conditions of employment if their child had not been stillborn or died; and
• the leave is associated with the birth of an employee’s child or the child of an employee’s spouse or de facto partner, or the placement of a child with the employee for adoption.

This protection applies where a child is stillborn or dies on or after 7 November 2025.

The employer can only refuse or cancel the leave because of the stillbirth or death if an exception applies, or if the employee has requested that the leave be cancelled.

Employers who breach this protection could face civil penalties.

Exceptions to the Changes

Some exceptions can apply to the Fair Work Act changes. 

Right to cancel employer-funded paid parental leave

The new protections don't apply if an employer can refuse or cancel employer-funded paid parental leave because of stillbirth or the death of a child under the employee’s terms and conditions of employment, such as an employment contract or enterprise agreement.

It's important to note that this exception doesn't apply if the employee's terms and conditions of employment are varied by the employer after 7 November 2025.

No entitlement under terms and conditions of employment

The protection doesn’t apply if an employee isn’t entitled to employer-funded paid parental leave because of stillbirth or the death of a child under the terms and conditions of their employment.

However, this exception doesn’t apply if their terms and conditions are varied by the employer after 7 November 2025 to allow this.

Other leave entitlements apply

The protection doesn’t apply if an employee is entitled to other forms of leave related to stillbirth or the death of a child under their terms and conditions of employment.

When working out whether this exception applies, the other forms of leave that might be relevant don’t include 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.

What Baby Priya's Law Means for Your Business

The main impact of these changes will be where a company-funded parental leave policy is silent or unclear on the employee’s rights to take the leave in the event of stillbirth or infant death, the new laws make it crystal clear that employers cannot cancel or refuse the leave without the employee’s agreement. 

As an employer, you will need to ensure that you understand your rights and obligations under your existing parental leave policies and that any introduced employer-funded leave policies will need to align with the new laws.

By reviewing your policies and understanding your obligations, you can make sure your business is not only compliant but also a place where employees feel valued.

Source: Fair Work Australia