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 The mother of all battles 

The mother of all battles

29 Mar, 2008 09:21 AM
Australian women have the best chance in a generation of getting their hands on the holy grail of paid maternity leave possibly in the next 18 months.

There is almost a planetary alignment of elements which is making the idea an economic necessity as opposed to a social welfare impost or a totem of women's rights.

There is the severe shortage of skilled labour, the Rudd Government's goal to increase national productivity and the instigation of a Productivity Commission inquiry in January to examine a paid maternity leave scheme for Australia.

In short, it is an employees' market.

This week we have seen retail giant Myer announce six weeks paid maternity leave for its 10,000 permanent workforce, 81 per cent of whom are women.

National grocery chain ALDI followed suit with a 14-week scheme paid at 50 cent of average wages for its 3300 workforce, 60 per cent of whom are women.

ALDI went one step further, announcing its 12 months unpaid maternity leave, a national standard for nearly 30 years, would increase to 14 months.

What might seem generous to us here is actually a national standard in ALDI's home country of Germany where all women are entitled to 14 weeks paid maternity leave on full pay.

Both companies cited a desire to increase employee satisfaction, stop staff turnover and to hang onto the experienced long-term staff.

ALDI group managing director, Michael Kloeters, described paid maternity leave as "the next logical step" to retain the company's most valuable commodity its employees.

"We invest a substantial amount of time and money in employees and don't like to lose them, so we are hoping the provision of paid maternity leave will be an attractive retention strategy," Kloeters says.

In a labour market where unemployment is at a 30-year low and where employers are looking to trim costs, particularly the expensive inconvenience of staff turnover, it's a wonder paid maternity leave is still relatively rare in Australia.

In a 2002 paper citing the business case for paid maternity leave a few years ago, the Federal Government's Equal Opportunity for Women in the Workplace Agency found employers who had introduced paid leave reported huge falls in staff turnover and the cost of replacement and training of new employees.

The paper cited NRMA's experience which saw an increase in staff returns from maternity leave leap from 32 per cent to 85 per cent in the five years to 1998 after it introduced paid maternity leave.

Westpac reported a 30 per cent rise in its maternity leave returns, saving the company $6 million in replacement costs.

Despite these compelling case studies being on the public record for more than five years, only one in three Australian women have access to paid maternity leave in a variety of schemes offering mostly six to 10 weeks paid leave usually on full or three-quarter pay.

The majority of these women are either in the public service or at the executive level of our top banks, financial services and law firms, uniformly earning more than $75,000 a year.

In 2001, the Australian Catholic University introduced a 12-month paid maternity leave scheme with a combination of full and part payments during the year. It is by far one of the most generous schemes on offer in Australia.

A universal scheme seeded by some form of government funding like the Howard government's baby bonus, is seen by unions, the Human Rights and Equal Opportunity Commission and women's groups as the only way most working women on average pay of $45,000 a year can hope to benefit from paid maternity leave.

All of those years of driving the argument for paid maternity leave based on social grounds and discrimination could well be leap-frogged by sheer economic necessity by next year's federal budget.

The National Foundation for Australian Women's Marie Coleman believes the labour shortage is the key and provides Australia with a unique opportunity.

"We see it as firmly bedded in two kinds of issues, one is enhancing human capital and the other one is enhancing productivity which is, I think, a safer way to start debating this issue than going back to sex discrimination and women's rights," Coleman says.

"I think there has been a tendency to say that if you offer someone paid maternity leave you're offering them a condition of employment or you're offering them a welfare benefit."

The Howard government's 2004 baby bonus, which will increase to $5000 in July, was seen as encouraging working women to reproduce but along with family tax payments and child care rebates, did not necessarily encourage them to stay in full-time work.

Australian women would be green with envy to learn their counterparts in Britain can now get up to 39 weeks paid maternity leave, an increase from 26 weeks.

Eligible women are paid up to 90per cent of their average pay through a combination of employer payments and social insurance for six weeks and then a smaller amount after that.

Among the list of 30 OECD countries that have paid maternity leave schemes, Australia and the United States are the odd ones out, offering only unpaid leave.

This leaves us out in the cold compared to Mexico, Turkey, Slovakia, the Czech Republic and Greece which all have paid maternity leave of between 12 and 28 weeks paid at varying percentages of the average wage.

Unpaid leave has been a standard in Australia since 1979 and was broadened into parental leave in 1990. But arguments for paid leave have been fought and lost regularly since, including one which says a paid leave scheme would compensate for the gender pay gap which the ACTU says has widened from 13 per cent to 16per cent in the past two years under WorkChoices.

A Newspoll commissioned by NFAW last July found 76 per cent of Australians supported paid maternity leave for working women.

Arguments against paid maternity leave have centred on the cost to employers, estimated in 2004 by former finance minister Nick Minchin at more than half a billion dollars a year.

The Howard government saw the idea as unjustified when it would only benefit working mothers while "ignoring all other mothers".

But the estimated cost of universal paid maternity leave in Australia would cost half of the $1.2 billion spent on the baby bonus.

The Australian Democrats through Senator Natasha Stott Despoja have made several attempts to introduce universal paid maternity leave through a private senator's bill.

They have lost the vote each time but in her most recent attempt last year, Senator Stott Despoja said Australia had the eighth lowest participation rate of women of child-bearing age in the workforce at 72.4 per cent compared to Sweden at 86.4 per cent. She quoted the Australian Bureau of Statistics publication, Australian Social Trends 2007, as reporting that one in five Australian women left the workforce after having a child because of inadequate or non-existent maternity leave arrangements. "The survey also showed that 57 per cent of women did not use paid maternity leave because it was 'not available or offered by the employer'," Senator Stott Despoja said.

Like the ACTU, Sex Discrimination Commissioner Elizabeth Broderick sees the logic in using the baby bonus as the basis for a government-funded scheme of 14 weeks paid leave in line with the International Labour Organisation standard.

The fortnightly payment would be based on the federal minimum wage of $520 a week, with a top-up, to be paid by the employer, to the level of the recipient's average ordinary time earnings.

Broderick says those women who most need paid maternity leave cannot get it.

"I do think the labour shortage ... will probably drive more private paid maternity leave schemes," Broderick says. "There will still be women who are in industries that aren't well-funded, that are low income, women who are contractors or casual workers or self-employed, or on farms, it's those women who fall between the gaps."

The ACTU says only 8 per cent of women in the retail and hospitality sectors have paid maternity leave compared to 56 per cent of professional women.

The ILO standard is based on the length of time needed by a woman to recover physically and emotionally from childbirth and to establish a breast-feeding routine.

Coleman says the experience in Britain and New Zealand has shown paid leave enhances the mother's attachment to her job, ensuring the employer does not lose their investment.

Most of the OECD country schemes are funded by social insurance or by the state, or a combination of both, with only a handful by the employer.

"This is has got nothing to do with social welfare, this is about a replacement for the income which you are no longer earning while you take this leave," Coleman says.

National secretary of Australia's largest union, the Shop Assistants' Union, Joe de Bruyn, says a universal scheme is essential because it would "take decades" to negotiate company by company. After Myer

and ALDI,

the only

other

significant

retailers to

offer paid leave

are fashion chain

Noni B and YUM,

the parent company of KFC and Pizza Hut. De Bruyn now has his sights set on David Jones and Target.

"It's a big breakthrough because this is the first major company that's gone down this path," de Bruyn says.

"If you look at all the developed countries around the world, it's only Australia and the United States that does not have a system of paid maternity leave. It wouldn't be a big cost to employers at all and certainly very manageable."

As part of her own induction into her the role as sex discrimination commissioner five months ago, Broderick has recently been travelling around Australia in remote and regional areas hearing concerns of local people. "As I go around on my listening tour I've had women who have said to me they've gone back to work a week after they've had the baby because it was the only way they could afford to have a child," Broderick says.

"Some of the women are going back into the workforce very, very quickly after having a child when the ILO standard is 14 weeks."

Either way, Coleman believes the Productivity Commission report, which is not due until February next year, is likely to offer a range of options for the Government in time for the start of the budget cycle.

As Senator Stott Despoja told the Senate last year when introducing her private senators' bill, it was high time Australia joined the OECD in providing what should be regarded as a necessity.

"Countries such as New Zealand and the UK are steaming ahead with a paid maternity leave system where taxpayers, through government payments, provide a basic period of paid leave that also allows for employer top-ups," Stott Despoja says.

"Legislative action in this area is long overdue, with many Australian working mothers forced to 'pay' for their maternity leave through the use of their personal holidays, long service leave and sick leave."

While the wait for yet another inquiry is frustrating, Broderick says that there is a need to re-examine the modelling done in previous reports, including the 2002 HREOC report, because circumstances have changed.

"It has be a nil cost to small and medium-sized businesses, we don't want to replace good schemes

that are already out there

but there's definitely a

place for a federally-

funded scheme," Broderick says.

"We need a scheme quickly,

there's no question about that,

but we can't just take a scheme

that was devised in 2002 and

transplant it into 2008.

"The fact is, the rest of the

world has moved on since then."

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