NCWNZ Economic Independence Action Hub on Paid Parental Leave

Paid parental leave is a government payment to help make up for lost income when you, an employee, has a new baby. It is also available to the self-employed. As usual criteria apply, but it is a legitimate right for all. Right?

Well, no, actually. Stuff reporter Uma Ahmed articulated this when she published an article "Directors hitting a bump when it comes to parental leave" on 8 February 2022 (reprinted in the Southland Times on February 9, 2022, and then followed up with "Why directors not being eligible for leave is an equity issue" (21 March 2022). Persons in elected positions, e.g., territorial authorities or directors of companies, are not eligible as they are not considered to be employees: they are contractors.

Who knew? Well some elected young women didn’t think to ask the question until after they declared their pregnancies. What did they find? There are no universal protocols to cover this situation.

Institute of Directors - video for report summaryWhen the matter was raised within the Institute of Directors, it was found that current legislation does not permit directors to take any sort of extended leave of absence but that individual companies may develop appropriate policies to allow such leave. A subsequent research paper “Should I stay or should I go? Directors, leave of absence and liability" states where the current law sits and raises questions about directors’ liabilities under the Companies Act 1993.

Similarly with territorial authorities, no universal policies but there are some accepted protocols within some councils, but one has to seek permission and certainly paid leave is not available. Interest was piqued within the NCWNZ Economic Independence Action Hub. Was this an equity issue, creating barriers to achieving diversity amongst such roles, diversity of gender, age, experience, skills?

Three different groups were contacted: Women on Boards, Institute of Directors and Local Government New Zealand with the following results:

Women on Boards – this organisation is having internal discussions on this topic.

Institute of Directors – is taking this issue seriously and thinks there will need to be a law change – involving the Companies Act, Financial markets Conduct Act, Health & Safety at Work Act, D&O Insurance and Remuneration for self-employed contractors which is acknowledged as the status of directors.

Local Government New Zealand (LGNZ) had already been considering this topic when our group contacted them. They welcomed our input into their discussions. At the end of January 2023, they sent a paper to all local government councils making suggestions about how parental leave and child care clauses could be handled including templates for appropriate policies to be adopted.

Their paper begins with the following statement:

Reflecting our commitment to diversity and inclusivity LGNZ has developed the following policies on child-care allowances and parental leave for the consideration of councils and possible adoption. Both are in the form of templates.

  • The draft “childcare allowance clauses” have been drafted to allow for their inclusion into a Council’s “Elected Member Expenses, Allowances and Reimbursements Policy” (Expenses Policy). Councils can, if they wish, also adopt them as a separate policy.
  • The draft “parental leave” clauses are better adopted as a standalone policy, given that they concern the matter of leave, rather than the payment of a specified allowance.

Our Hub group is generally satisfied with what has been suggested by LGNZ although in their paper, parental leave is just that, not paid leave.

A letter to councils from NCWNZ is being sent to find out whether they intend implementing the policies suggested by LGNZ. We will advise relevant branches when their council will receive this letter so any local follow–up can be planned.


To read more articles from The Circular (March-April 2023) issue 640, click on the tag below.
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