Pressure mounts for retailers to follow Woolworths on paid maternity leave

Every retailer is under pressure to introduce paid maternity leave after Woolworths, Australia’s largest retailer and biggest employer, announced it will offer eight weeks paid maternity leave to its staff.

Rob Lake, a retail expert from recruitment firm Orex Recruiters, says big retailers such as David Jones and Coles (now owned by Wesfarmers) will have no choice but to follow Woolworths’ lead.

Pressure will also mount on small and medium retailers who could struggle to attract staff if they do not have paid maternity leave. “Woolworths has raised the bar by two weeks. This is something gathering momentum and it will continue to develop and grow,” Lake says.

Woolworths will offer eight weeks paid maternity leave, consisting of six weeks paid leave and a bonus of two weeks’ pay upon return to work. The length of unpaid parental leave has been doubled to two years.

The move brings Woolworths in line with Myer and Aldi, which increased their paid maternity leave provisions earlier this year. Myer will offer six weeks paid maternity leave while Aldi will offer 14 weeks maternity leave on half pay.

Woolworths’ chief executive Michael Luscombe would not reveal the cost of the maternity leave changes, but says he expects the decision will eventually pay for itself by slashing the costs of replacing parents who do not come back to work and training new staff. About 55% of Woolworths’ staff are women. The company has about 1700 women on unpaid maternity leave and every year about 12% are not returning to work.

But the Australian Retailers Association says small and medium retailers cannot afford paid parental leave. The group, which lodged its submission to the Productivity Commission’s inquiry into paid parental leave yesterday, says individual companies should be allowed to set their parental leave provisions, unless the government is prepared to provide funding.

“There is an obvious momentum towards a national parental leave scheme, but we dispute such a scheme needs to be supported by employer contributions,” ARA chief executive Richard Evans said. “SME retailers simply can’t afford it. Any introduction of a national paid parental leave scheme must be taxpayer funded – with essential rebates to small business operators for its compulsory administration on behalf of the Government.”

Lake believes childcare could be the next battle ground of employers. “I don’t think paid maternity leave is the real issue. When we talk to pregnant women, what they are really after is accessible, reliable childcare when they go back to work. The company that does that will gain an advantage.”

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