Individual flexibility arrangements
An individual flexibility arrangement is a written agreement used by an employer and employee to change the effect of certain clauses in their award or registered agreement.
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All awards, enterprise agreements and other registered agreements have to include an individual flexibility arrangement (IFA) clause. If a registered agreement doesn’t include one, the model clause from the Fair Work Regulations 2009 will apply.
An IFA is used to make alternative arrangements that suit the needs of the employer and employee.
An IFA can’t be used to reduce or remove an employee’s entitlements.
An employer has to make sure that the employee is better off overall with the IFA than without it compared to their award or registered agreement at the time the IFA was made. To do this they should look at the financial and non-financial benefits for the employee, as well as the employee’s personal circumstances.
An IFA can change how certain clauses in an award or registered agreement apply to the employee covered by it.
Example: how an IFA can change an award or registered agreement
Sally is covered by an award that says ordinary hours are worked between 9am and 5pm. She makes an IFA with her employer to work her ordinary hours between 7am and 3pm. The ordinary hours of work for the other employees will still be 9am to 5pm.
Changing award clauses
In awards you can use an IFA to vary clauses about:
- arrangements for when work is performed, such as working hours
- overtime rates
- penalty rates
- leave loading.
Changing agreement clauses
The flexibility clause used in a registered agreement will say what clauses can be changed.
An IFA can be made at any time after the employee has started working for the employer.
Both parties must genuinely agree to an IFA. An employee can’t be forced to sign an IFA to get a job. An employee’s right to refuse to agree to an IFA is protected by their general protections. This means that they can’t be discriminated against or treated adversely for refusing to agree to one.
An employer or employee can ask the other to enter into an IFA. When they have agreed on what arrangements they want to make it has to be put in writing and signed by both the employer and employee. If the employee is under 18 years it has to also be signed by their parent or guardian.
The employer should keep a copy of the signed IFA and give a copy to the employee.
If an IFA is not made properly it will still apply to the employee. However, the employer may receive a fine.
An IFA doesn’t need to be approved or registered with the Fair Work Ombudsman or the Fair Work Commission.
An IFA may be ended at any time by written agreement between an employer and employee. Otherwise, the IFA can be ended by giving the other party appropriate notice. An IFA made under an award can be ended with 13 weeks notice. A registered agreement will say how much notice is required, but it can’t be more than 28 days.
IFAs made under an award prior to 4 December 2013 can be ended with 28 days notice.
Source reference: Fair Work Act 2009 s.144 and 202