Paid maternity leave in 'best practice' organisations: introduction, implementation and organisational context

Australian Bulletin of Labour, June, 2007 by Sara Charlesworth

In developing family-friendly policy initiatives aimed at the workplace, many European countries work from a platform of mandatory measures, aimed at minimum labour standards, often with efforts to encourage provision above the standard, such as through management initiative or collective bargaining (see OECD 2002, pp. 16-18). The approach in Australia stands in sharp contrast. Consistent with its commitment to deregulation, the current Federal Government's policy approach to the provision of family-friendly measures at the workplace is a largely passive one. Apart from the test case mechanism, which was effectively removed in 2006 via the Work Choices legislation, this approach relies almost exclusively on the voluntary initiatives of employers either unilaterally or through 'enterprise bargaining' (through formal collective or individual agreements). While the Government disseminates information promoting the benefits of family-friendly measures to employers, and celebrates good practice, responsibility for family-friendly initiatives is seen as falling to individual workplaces, either through management decision-making or through enterprise bargaining.

This approach has relied on an appeal to a narrow version of the 'business case', which focuses on the potential advantages of family-friendly policies like PML in realising 'bottom line' cost-benefits through attracting and retaining staff, reducing absenteeism and turnover, and improving morale and productivity (DFACS 2002, p. 50). In this approach, introducing family-friendly benefits is deemed to be in the short-term financial interests of individual businesses. As a result, it is assumed that informed and rational management will move towards the voluntary provision of such benefits at the earliest opportunity (Charlesworth et al. 2002, p. 17). A frequently cited example is that of the Westpac Banking Corporation, which has reported that its retention rate has increased from 54 per cent in 1995 to 93 per cent in 2000 as a result of introducing six weeks paid maternity leave, which reportedly saved the company $6 million by reducing turnover (EOWA 2004b; HREOC 2002a, p. 57). In a number of countries there is a strong emphasis on a broader understanding of the business case as one driver for action on the provision of family-friendly benefits (Evans 2001, p. 24). This version of the business case is identified with the notion of labour market efficiency, embracing the long-term interests of individual businesses and indeed the interests of business in general, and sees a clear role for government, including working with business, offering financial support, and promoting discussion of good corporate citizenship (Evans 2001). Moreover, the business case is not used as the only rationale for policy, and is balanced by the weight given to other important policy principles such as quality of life, individual choice, and gender equality (Charlesworth et al. 2002, p. 19).

In recent times in Australia, however, we are seeing some resiling even from the limited version of the business case. While stressing the mutual benefit of agreed family-friendly benefits to employee and employer, the Government has also been keen to dampen expectations that all businesses should provide some family-friendly benefits to employees. The approach is that it is up to individual employers to decide if the provision of family-friendly benefits is in their interest or not. It is also increasingly argued that small business in particular should somehow be exempt from the provision of key family-friendly benefits (Howard 2003, pp. 5-6). During the community and political debate about a national PML scheme in 2002-2003, the Government conceded the inadequate access women in lower paid, part-time and casual work have to paid maternity leave, and the short duration and conditions attached to leave available in some organisations. However, rather than being seen as supporting the argument for a government-funded scheme and and/or government intervention to smooth the costs of providing paid maternity leave for small business, the Prime Minister's response was 'to rule out imposing onerous obligations upon employers, particularly in small business' (Howard 2003, p. 6). In this context the paper now examines what then drives organisations to introduce PML.