Baby Priya's Law: new parental leave protections for employers

In Australia's evolving workplace landscape, ensuring fair and compassionate leave arrangements is more important than ever, especially when tragedy stikes. The new legislation known as Baby Priya's Law introduces crucial protections around employer-funded paid parental leave in the event of stillbirth or the death of the child. As a business owner, HR or payroll leader, you need to understand how this change affects your obligations, and how you can manage it confidently.

In this blog we'll define what the law is, examine the background and data, explore what it means for employees and employers, unpack exceptions, and provide practical tips for compliance and policy updates.

What is Baby Priya's Law?

Under the Fair Work Amendment (Baby Priya's) Act 2025, changes to the Fair Work Act 2009 (Cth) ensure that when a child is stillborn or dies, an employer cannot refuse or cancel employer-funded paid parental leave that an employee would have entitled to if the child had not been stillborn or had died.

In simpler terms: if you already approved paid parental leave for an employee, or the employee would have qualified for it, the employer cannot revoke it because of the death or stillbirth of a child (for events on or after 7 November 2025).

Background and relevant data

Named in memory

The law is named after Baby Priya, whose mother had pre-approved parental leave cancelled after Priya died at six weeks old. That case became the catalyst for the reform.

Why the reform

• In 2022, more than 3000 Australian families experienced a stillbirth or neonathal death.
• Previously, employer-funded paid parental leave had no explicit federal protection in these circumstances, leaving ambiguity for both employees and employers.

High-level changes

• The amendment inserts a new section (for example, section 333X) into the Fair Work Act providing the specified protection.
• The protections apply only to employer-funded paid parental leave (not unpaid parental leave under NES) and apply for stillbirth or death events from 7 November 2025.

What does it mean for employees?

• Entropy of entitlement: if you are entitled to employer-funded paid parental leave under your terms and conditions, and your child is stillborn or dies, you cannot have that leave cancelled solely because of stillbirth/death.
• Financial and emotional security: this means you can focus on grief or recovery without the added stress of returning to work or losing pre-approved leave.
• Clarity: the law removes ambiguity, you have a legal safeguard rather than relying purely on goodwill or ad-hoc policy.
• What it doesn't guarantee: the law does not force an employer to offer employer-funded paid parental leave in the first place if the employment terms don't include it. It also excludes unpaid parental leave (which was already protected under NES).

What does it mean for employers?

• Review your policies now: if your organisation offers employer-funded paid parental leave (or intends to), you must ensure your contracts, enterprise agreements and parental leave policies align with these new projections.
• You're not required to introduce paid parental leave: if your organisation doesn't currently offer employer-funded paid parental leave, the legislation does not compel you to start offering.
• Be clear and consistent: since this is a sensitive scenario, clarity in policy and consistent application will help avoid risk or civil penalty for breach.
• Policy changes must be evident and consensual: you cannot unilaterally vary terms after 7 November 2025 to exclude this protection if the prior policy naturally would have included entitlement.
• Cultural impact: being seen to treat bereaved parents failry can enhance your employer brand, staff morale, retention and trust.

Exceptions and key limitations

Here are the main scenerios where the protection will not apply:

Important: the law protects going forward from the event date (stillbirth/child-death) on or after 7 November 2025. Past events are not covered.

How to manage with confidence: practical steps for employers

1. Audit your parental-leave policy and employment contracts
   
   • Identify whether you offer employer-funded paid parental leave.
   • Check whether your policy covers or excludes stillbirth/infant-death scenarios.
   • Ensure any clauses that allow cancellation/refusal in these events pre-date 7 November 2025 and are lawful.
2. Update your policy documentation
   
   • Add a clear statement referencing the new protetion (e.g., "Employer-funded paid parental leave cannot be cancelled or refused due to stillbirth or death of a child, for events on or after 7 November 2025").
   • Provide guidance for managers on how to support employees in these circumstances.
3. Train HR, payroll and manager on the change
   
   • Ensure people know the triggers, timelines, and obligations.
   • Prepare guidance for compassionate leave, return-to-work planning and support services for grieving employees.
4. Embed into payroll/HR systems
   
   • If using rostering, timesheets, payroll and leave modules (like Microkeeper's system), configure triggers so approved leave cannot be revoked in these scenarios.
   • Record-keeping: keep evidence of eligibility and the scenario (stillbirth/child-death), leave application/approval and policy version.
5. Communicate to employees
   
   • Add a note in the employment policy handbook or intranet: "We comply with Baby Priya's Law, here's what it means for your".
   • Emphasise your supportive culture and the employee assistance program (EAP) or support networks.
6. Respond thoughtfully in live cases
   
   • If an employee notifies you of stillbirth/infant-death, treat it with sensitivity and apply the entitlement.
   • Don't assume return-to-work is immediate, you may need to coordinate flexible or phased return.
   • Consult your legal/HR team if unusual circumstances or potential clause exceptions arise.

Frequently asked questions (FAQs)

1. Does Baby Priya's Law apply to unpaid parental leave?
   No. The protection applies to employer-funded paid parental leave. Unpaid parental leave is already protected under the NES in these circumstances.
2. What if the employee's contract was signed before 7 November 2025 and includes a clause allowing cancellation if stillbirth/infant-death?
   That clause maybe a valid exception undert the law. However, you cannot update/introduce such a clause after 7 November 2025 to avoid this protection.
3. Does the law mean I must provide employer-funded parental leave if I haven't already?
   No. The law does not create a new entitlement to employer-funded paid parental leave, it simply protects the entitlement if it already exists under your terms and conditions.
4. What are the penalty risks for my business if I breach the new law?
   Breaching the protections may expose you to civil penalties undert the Fair Work Act for unfair cancellation/refusal of approved employer-funded paid parental leave in the specified circumstances.

‍

Baby Priya's Law marks a signficant step forward in Australia's workplace by ensuring that employer-funded paid parental leave cannot be cancelled due to stillbirth or the death of a child (for events on or after 7 Novemeber 2025). For employees, it offers certainty and support during deeply difficult times. For employers, it requires thoughtful review of leave policies and HR systems, but also offers an opportunity to demonstrate a culture of care, fairness and compliance.

At Microkeeper, we understand how leave management, rosters, payroll and HR interlink, and we're here to help you build the systems, policies and workflows to stay compliant and support your people.