An Individual Flexibility Arrangement (IFA) is a written agreement used by an employer and employee to change the effect of certain clauses in their award or registered agreement. It is used to make alternative arrangements that suit the needs of the employer and employee. An employer has to make sure that the employee is better off overall under the IFA than without it, when compared to their award or registered agreement. To do this they should look at the financial and non-financial benefits for the employee, as well as the employee’s personal circumstances.
What Can Be Varied?
In awards you can only use an IFA to vary clauses about:
- Arrangements for when work is performed, such as working hours;
- Overtime rates;
- Penalty rates;
- Allowances; and
- Leave loading.
The flexibility clause in a registered agreement will say what clauses can be varied.
Making and Ending an IFA
An IFA can be made at any time after the employee has started working for the employer. This means an offer of employment cannot be conditional on an employee entering into an IFA. An employer or employee can ask the other to enter into an IFA. If they agree on what arrangements they want to make, the arrangements must be put in writing and signed by both the employer and employee. 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.
About Employment Innovations
Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.
The information provided in this knowledge base article is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.