Entitled to paid parental leave without commencing work

Published 19 December 2023 | 2 min read

Employee argues MBIE’s calculation was wrong 

In a recent ruling that may leave many New Zealand employers scratching their heads, the Employment Relations Authority (ERA) has declared that a woman, Shannen Rogers, who never commenced work with her new employer, is still entitled to paid parental leave (PLP). The case arose after the Ministry for Business, Innovation and Employment (MBIE) denied Rogers' application for PLP, stating she failed to meet employment requirements.

According to the Parental Leave and Employment Protection Act 1987, an employee qualifies for PLP if they have been employed for an average of 10 hours per week in 26 of the 52 weeks before the baby's due date. The twist in this Kiwi tale lies in the fact that Rogers never officially started her employment due to multiple deferrals and, eventually, the cancellation of the offered role.

MBIE vs. ERA

Rogers, undeterred by the MBIE's denial, argued that her employment contract with the company should be considered, even though she never clocked in a day of work. The ERA, acknowledged the existence of an employment relationship, asserting that the period during which Rogers was ready, willing, and able to perform work should be taken into account when determining her eligibility for PLP.

The MBIE, relying on the technicality that Rogers didn't commence work, asserted that her employment with the company shouldn't count. However, the ERA's decision challenges this notion, recognising that the readiness to work should be acknowledged, even if circumstances prevented the actual commencement.

The ERA ordered the MBIE to arrange PLP for Rogers, emphasising the importance of considering the period when she was prepared to work. The decision sheds light on a nuanced interpretation of employment relationships, urging employers and HR professionals to reconsider their approach to situations where employment is hindered by unforeseen circumstances.

The path to parental leave entitlement isn't always straightforward. Employers, managers, and HR must consider the broader context of employment relationships, acknowledging the nuances that may arise due to external factors beyond the employee's control.

Paid parental leave, a crucial aspect of supporting new parents, ensures financial stability during a significant life transition. As the legal landscape around employment evolves, it becomes essential for New Zealand businesses to stay informed and adapt their policies accordingly.