Individual Flexibility Arrangements

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The Individual Flexibility Arrangements (IFA)

An IFA can be used to vary certain terms of a modern award or enterprise agreement as it applies to that particular employee covered by the IFA.

Flexibility terms within modern awards allow IFAs to vary:

  • arrangements for when work is performed such as working hours
  • overtime rates
  • penalty rates
  • allowances, and
  • leave loading.


The “Better-Off Overall” Test

If an IFA is agreed to, the Fair Work Act 2009 requires that the employee must be better-off overall than if there was no IFA. It is the employer’s responsibility to ensure that an employees wage is sufficient to compensate them for any terms they forgo, that they would otherwise be entitled to.

In assessing whether the employee is better-off overall, the employee’s personal circumstances and any non-financial benefits which are significant to them can also be considered.

To ensure compliance with this requirement, we recommend that employers regularly monitor the wages of each employee, particularly if an employee is performing substantial amounts of overtime.


Further Requirements

An IFA does not form part of the employment agreement and must not be used as a condition of employment. It is not compulsory for either party to agree to an IFA, and a person cannot be treated adversely or discriminated against for refusing to agree to an IFA.

All IFAs can be terminated by either party by given notice (usually 4 weeks) in accordance with the IFA.

Failure to ensure that an IFA is properly made in accordance with the Fair Work Act may result in penalties of up to $6,600.00 for an individual or $33,000.00 for a company.

If you become concerned that you may not be in compliance with IFA requirements, we would be happy to review these at any time.

Please direct your employment law enquires to Tony Pattinson at Ferguson Cannon Lawyers.

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Category: Employment Law, Fact Finders, General

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