Paternity leave is part of Parental leave.
It is an employee benefit that provides paid or unpaid time off work to care for a child or make arrangements for the child's welfare. The term "parental leave" includes maternity, paternity, and adoption leave. Often, the minimum benefits are stipulated by law.
So this contract is for 3 months only when someone who is on leave is cameto come back to the workplace. He/she holding his/her position and job open over the contract period over.