CM - it's not specifically her company that's dictating this, to the best of my knowledge it's federal legislation that places a limit on the amount of parental leave that can be taken by both parents. My understanding is that because the full amount of legally allowed parental leave can actually be taken by either parent (it doesn't have to be the mother - I think this is in place to ensure adequate leave rights for fathers should they be the sole or primary carer for whatever reason), the law is in place to prevent both parents within a family unit taking the full amount of parental leave as allowed by the award.

But it only applies to parental leave, annual leave does not going to affect parental leave entitlements.