Policy for extended unpaid carer leave: Is this the right solutions?

Human Resources: Informal carers – spouses, children, extended family and friends – make an invaluable contribution to the care and wellbeing of older people and the community. And while caring can be a source of personal satisfaction, juggling work and care can be challenging, especially for people providing high levels of informal care.

The Productivity Commission has released a position paper A case for an extended unpaid carer leave entitlement? which is looking at the potential economic and social impacts of adding an entitlement to extended unpaid leave to the National Employment Standards so that working carers can take extended leave to care for their loved ones. The inquiry was recommended by the Royal Commission into Aged Care Quality and Safety.

Many older people benefit from the care provided by their family and friends. Carers, of which 70% are women and aged between 45-64, can find it difficult to combine their work and caring responsibilities. In fact, 47% of employed carers work in full time roles and they experience poorer mental health and a wage gap as a result of caring.

“The choices people make about how to care for their loved ones are personal and influenced by several factors. When a family member needs more care, some working carers feel they have little choice but to quit their job or retire early to care,” Commissioner Catherine de Fontenay said.

Internationally, the duration of carer leave entitlements varies widely. In Australia employees can access 2 days of unpaid carer leave. This leave is per care episode and is in addition to paid sick leave entitlements. In the United States 13 states offer up to 12 weeks of Paid Family Leave which can be used to care for any relative. In Denmark carers enter a contract with their municipality to provide care full time for 6 months with the option of extending for an additional 3 months, while in Italy employees can access 3 days of paid leave per month. They are also entitled to 2 years of unpaid leave to provide long term care.

The Commission has put forward a potential model for an extended unpaid leave entitlement, based on evidence about the likely effects of different design features, and the need to align with the features used in the National Employment Standards for other types of leave.

The Ai Group said “Given that the vast majority of caring arrangements extend beyond 2 years in a wide variety of circumstances, employed carers need flexibility in the labour market rather than withdrawing
from paid employment for extended periods on unpaid leave. This is best facilitated through the [Fair Work] Act’s right to request flexible work arrangements which currently makes employees who meet the definition of a carer in the Carer Recognition Act 2010 (Cth) eligible to make such requests.

“The regulatory effect on employers is an important consideration with an obligation to provide an extended leave entitlement attracting a range of compliance and productivity costs, not to mention the difficulty in sourcing replacement employees with equivalent skills.”

The Australian Chamber of Commerce and Industry (ACCI) said in its submission “Improving flexibility in the workplace relations system and empowering employers and employees to agree to a flexible arrangement is a more effective solution for enabling employees to undertake longer-term informal caring responsibilities.”

Overall, the Commission found that few employees would use the entitlement to unpaid leave to care for an older person as the majority would prefer flexibility to better manage care and work commitments. However, for those who would use an extended unpaid leave entitlement, the policy would clearly be of benefit to them and those they care for.

“It would not substantially increase the number of informal carers, the workforce participation of carers, or reduce the demand for formal care,” Commissioner Martin Stokie said.

Extended unpaid leave is also not the highest priority for the majority of carers.

“What most working carers of older people want is greater access to flexible working arrangements. When carers and employers can work together to find mutually agreed arrangements, everyone benefits. Recent changes to strengthen the right to request flexible work in the National Employment Standards – to take effect in June 2023 – are expected to provide carers with greater workplace flexibility, and in time, could further reduce the need for an entitlement to extended unpaid leave.

“It is important that carers are well informed about how to request flexible working arrangements,” Mr Stokie said.

The Royal Australian and New Zealand College of Psychiatrists said a minimum statutory entitlement for an employee to take unpaid leave for caring will “help relieve burden on informal carers. This will support the health, independence, dignity and quality of life of older Australians and their informal carers.”

The Commission is holding public hearings on the position paper on 20th and 21st March, and is taking submissions until 28 March 2023. The final report will be given to the government in May 2023.

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