An Individual Flexibility Agreement (IFA) is an agreement between an employer and an employee that introduces varied terms and conditions to the existing award or enterprise bargaining agreement. Although they may vary the current agreement, minimum entitlements and protections still need to apply.
Why are Individual Flexibility Agreements used?
The purpose of the IFA is to introduce flexibility in the workplace so that the needs of both the employers and employees are met. This may include terms and conditions that better incorporate the needs of the business or the personal circumstances of an employee. With greater flexibility, staff retention, efficiency and job satisfaction can be positively impacted, which can have an overall positive side effect on the business.
How does the right to an Individual Flexibility Agreement arise?
Awards and enterprise bargaining agreements are collective in nature. This means they apply to a wider group of employers and employees. The Fair Work Act 2009 (Cth) requires both awards and enterprise agreements to have a clause relating to a flexibility term. This term refers to the ability of both parties to the agreement to agree on a variation of the existing arrangement through an IFA.
What will the Individual Flexibility Agreement cover?
The IFA can include various clauses, but ultimately it will depend upon the flexibility clause outlined in the award or enterprise bargaining agreement. For an award, the flexibility clause usually allows an IFA to vary hours of work, rate of pay during overtime, leave loading and allowances. For an enterprise agreement, the matters included in the flexibility clause can widely differ, as these are bargained between the employer and employee. Technically, if the flexibility clause allows, all terms and conditions of the enterprise agreement may be varied through an IFA. If not, there may only be certain permitted terms and conditions that can be changed.
Who will be better off in an Individual Flexibility Agreement?
An IFA needs to ensure that the employee will still have the minimum entitlements in their arrangement. Similarly to the enterprise bargaining agreement, the test is to ensure that an employee is “better off overall”. To determine whether an employee is “better off overall” it is beneficial to speak to an employment lawyer who can provide their opinion on whether your arrangement would pass the test.
Whether you are an employer or employee, a specialist employment lawyer at LegalVision can determine whether an Individual Flexibility Agreement is right for your circumstances. At LegalVision, we can also help in drafting the Individual Flexibility Agreement, but remember that reference needs to be made to the flexibility clauses in your current award or enterprise agreement.