Landmark Fair Work Decision Backs Employer’s Refusal of Extended Parental Leave

Co-Authored by Vishaal Kudupudi

KEY TAKEAWAYS:

• The Fair Work Commission has found that an employer had reasonable business grounds to refuse an employee’s request for a further six months of unpaid parental leave.

• The decision confirms that employers can refuse an extension where they can demonstrate genuine operational pressures, provided the requirements of the Fair Work Act 2009 (Cth) are followed.

• Employers must still discuss the request, genuinely try to reach an agreement, consider the impact on the employee and provide detailed reasons for any refusal.

• The decision also confirms that paid parental leave taken during unpaid parental leave does not restart or extend the 12-month unpaid parental leave period.

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What Happened in Donnelly v Whitehaven Coal Mining Limited [2026] FWC 3200?

In Donnelly v Whitehaven Coal Mining Limited [2026] FWC 3200], the Fair Work Commission considered whether an employer was entitled to refuse an employee’s request for a further six months of unpaid parental leave.

Ms Jessica Donnelly was employed by Whitehaven Coal Mining Limited as a Specialist – Data Reporting within its highly specialised Data Analytics team. She was employed on a full-time basis with total fixed remuneration of approximately $187,000 per annum.

Ms Donnelly commenced a period of 12 months’ parental leave on 1 August 2025. She gave birth to her daughter on 9 September 2025 and was due to return to work on 3 August 2026.

During her period of parental leave, Ms Donnelly also received 26 weeks of paid parental leave under Whitehaven’s Parental Leave Policy. In January 2026, she advised her supervisor that she wished to extend her parental leave and, on 6 February 2026, formally requested a further six months of unpaid parental leave until 3 February 2027.

Whitehaven refused the request on 16 February 2026, relying on reasonable business grounds. Ms Donnelly subsequently brought a dispute application before the Fair Work Commission under s 76B of the Fair Work Act 2009 (Cth).

The dispute ultimately required the Commission to consider two important questions:

1. First, whether Ms Donnelly’s 12-month period of unpaid parental leave ended on 1 August 2026 or whether her period of paid parental leave meant that the unpaid parental leave period continued beyond that date.

2. Secondly, if the 12-month period had ended, whether Whitehaven should nevertheless be required to grant her the requested six-month extension.

 

What Did the Commission Decide?

The Commission found that Ms Donnelly’s 12-month period of unpaid parental leave had ended on 1 August 2026. Further, the Commission found that her entitlement to 26 weeks of paid parental leave during that period did not extend her statutory period of unpaid parental leave.

The Commission also found that Whitehaven had established reasonable business grounds for refusing Ms Donnelly’s request for a further six months of unpaid parental leave.

Whilst the Commission agreed that Whitehaven were not required to grant the extension, the Commission did not simply uphold Whitehaven’s preferred return date. Having regard to fairness between the parties, the Commission ordered a short extension of Ms Donnelly’s leave until 11 September 2026, with her return to work on 14 September 2026.

The decision demonstrates that there are various considerations when dealing with an extension request. Whilst an employer may establish reasonable business grounds for refusing the requested period, the Commission may nevertheless make an order that it considers fair in resolving the dispute taking into account the facts and circumstances of both parties’ position.

 

Why Was the Employer’s Position Accepted?

A significant aspect of the decision concerned the operational impact that Ms Donnelly’s continued absence would have on Whitehaven’s Data Analytics team.

During Ms Donnelly’s absence, the team had undergone significant changes. In around June 2026, it assumed responsibility for reporting for four additional NSW mine sites (Vickery, Tarrawonga, Maules Creek and Narrabri). The team also took on additional data engineering, reporting and software management responsibilities.

The evidence before the Commission was that the team’s workload had almost tripled following this expansion. The team had been unable to keep pace with incoming work, resulting in an accumulation of outstanding work tickets. Employees were also working beyond their ordinary hours, including on weekends to keep up with the workload. It was also advised to the Commission that management had concerns about the sustainability of the workload and associated psychological health and safety risks for the remaining employees.

Whitehaven also relied upon the specialised nature of Ms Donnelly’s position. She had significant experience with Corvus, now known as POLR, a mining-industry-specific software system. The evidence indicated that her technical experience made her particularly difficult to replace on a temporary basis. Further, Whitehaven confirmed that:

• It had already taken steps to address the increased workload, including recruiting additional employees and converting the employee who had initially been engaged to cover Ms Donnelly’s parental leave into a permanent employee;

• Engaging an external contractor for the requested six-month period would be impractical. The estimated cost was approximately $182,500 to $202,000 plus GST, with an onboarding period of approximately 12 weeks and provided evidence of this position.

The Commission accepted Whitehaven’s evidence and found that the employer had established reasonable business grounds for refusing the requested extension.

The decision demonstrates that an employer’s position is more likely to be accepted where it can provide specific, evidence-based reasons demonstrating the actual operational consequences of an employee’s continued absence, the impact on the business and the impact on other employees in the business.

 

Key Lessons For Employers – What Does the Decision Mean for Employers?

The key lesson from Donnelly is that an employer does not have to automatically grant a request for an extension of the 12-month unpaid parental leave currently provided for under the Fair Work Act.

Under s 76 of the Fair Work Act, an employee who has taken their available period of unpaid parental leave may request a further period of up to 12 months. However, the right to request an extension does not create an automatic right to receive the additional leave.

Under s 76A, an employer may refuse the request where the refusal is based on reasonable business grounds and the other statutory requirements have been satisfied.

The legislation identifies circumstances that may constitute reasonable business grounds, including where the extension would:

• be too costly;

• result in there being no capacity to change the working arrangements of other employees;

• make it impractical to change working arrangements or recruit a replacement employee; or

• be likely to result in a significant loss in efficiency or productivity or a significant negative impact on customer service.

Importantly, however, an employer cannot simply state that an employee is needed back at work. The employer should be able to demonstrate why the continued absence creates genuine operational difficulties.

In Donnelly, evidence concerning the increased workload, outstanding work, additional hours, recruitment efforts, specialised nature of the role and difficulties associated with obtaining a suitable temporary replacement including significant costs all assisted Whitehaven in establishing its position before the Commission.

 

What Should Employers Do When Receiving a Request

The decision highlights the importance of treating a request for an extension of unpaid parental leave as a formal statutory process, rather than simply an internal staffing decision. Employers should look to take the following steps:

1.      Genuinely discuss the request

Employers should engage with the employee about the requested extension and genuinely attempt to reach agreement.

2.      Consider the consequences for the employee

The employer must have regard to the consequences of refusing the request for the employee. This means that employers should not assess the request solely from an operational perspective. The employee’s personal circumstances and the practical consequences of requiring them to return to work should also be considered.

3.      Identify the actual business grounds

If the employer is considering refusing the request, it should identify the specific circumstances supporting the refusal.

Depending on the circumstances, this may include:

• staffing limitations;

• recruitment difficulties;

• increased workload;

• productivity or efficiency concerns;

• customer service impacts;

• the cost of replacement arrangements; or

• difficulties changing the working arrangements of other employees.

4.      Keep evidence supporting the decision

Employers should retain evidence demonstrating the operational impact of the employee’s absence.

In Donnelly, evidence concerning the significant increase in workload, outstanding work tickets, additional working hours and recruitment efforts was important to the Commission’s assessment and decision.

5.      Comply with the 21-day response requirement

Section 76A requires an employer to respond to an extension request within 21 days.

Where the request is refused, the written response should explain the reasons for the refusal, identify the particular business grounds relied upon and explain how those grounds apply to the employee’s request. The employer must also indicate whether it would agree to another period of leave and explain the relevant dispute resolution provisions.

6.      Consider whether an alternative arrangement is possible

Employers should consider whether the employee’s request can be accommodated in another form. This may include considering a shorter period of leave, alternative working arrangements or other options that may address both the employee’s circumstances and the employer’s operational requirements.

 

Key Lessons for Employees –  What Does This Mean for Employees?

The decision also provides important guidance for employees considering whether to request an extension of the unpaid parental leave period.

An employee who has taken their available period of unpaid parental leave may request a further period of up to 12 months. However, making a request does not mean that the additional period of leave will automatically be granted.

Employees should therefore be aware that an employer may refuse a request where it has reasonable business grounds for doing so and the statutory requirements have been met.

Employees should also understand that paid parental leave taken during a period of unpaid parental leave does not extend or restart the statutory period of unpaid parental leave. As confirmed in Donnelly, the 12-month period is calculated by reference to the period of unpaid parental leave, regardless of whether paid parental leave is also received during that period.

Where an employee is considering requesting an extension, they should:

• make the request in writing and within the required timeframe;

• clearly specify the additional period of leave requested;

• provide sufficient notice to allow the employer to properly consider the request;

• be prepared to discuss alternative arrangements with their employer; and

• consider whether a shorter period of leave or alternative working arrangements may be appropriate.

If an employer refuses a request, employees should carefully review the reasons provided and consider whether the employer has complied with the requirements of the Fair Work Act.

The Donnelly decision also demonstrates that the outcome of a dispute is not necessarily limited to either granting or refusing the employee’s requested period of leave. The Commission may consider what outcome is fair in the circumstances and may make an order providing for a different period of leave to that requested by the employee/refused by the employer.

Employees who are unsure about their entitlement to parental leave, the timing of a request or whether an employer’s refusal is lawful should obtain legal advice before taking further action.

 

How Can Coutts Help

Coutts Lawyers can assist both employers and employees with understanding their rights and obligations in relation to parental leave and requests for extensions.

We can provide advice to Employers on whether an extension request can be refused, whether reasonable business grounds have been established, and the requirements for responding to a request under the Fair Work Act. We can also assist with negotiating alternative arrangements and resolving disputes concerning parental leave.

We can also assist Employees to determine whether a refusal of their extension request is valid and alternative options available to that employee in negotiating with their employer.

Should you require assistance in respect to any of the issues raised in this blog or any other employment law matter, the Employment Law Team at Coutts have the experience and expertise to help!

Coutts can assist both employers and employees with understanding their rights and obligations in relation to parental leave and requests for extensions.

We can provide advice to Employers on whether an extension request can be refused, whether reasonable business grounds have been established, and the requirements for responding to a request under the Fair Work Act. We can also assist with negotiating alternative arrangements and resolving disputes concerning parental leave.

We can also assist Employees to determine whether a refusal of their extension request is valid and alternative options available to that employee in negotiating with their employer.

Should you require assistance in respect to any of the issues raised in this blog or any other employment law matter, the Employment Law Team at Coutts have the experience and expertise to help!

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