Any employer knows how valuable it is to offer flexible working arrangements to certain employees in the workplace. Particularly during COVID-19, flexible working arrangements were extremely common. 

Providing this kind of flexibility in the workplace can have a good impact on staff retention, efficiency, productivity and overall job satisfaction. It also makes employees feel valued because their work is being tailored to their personal needs. 

However, it’s important that this is all in writing to ensure that an employee’s minimum entitlements are met. 

This is where an Individual Flexibility Agreement (IFA) comes in. 

An Individual Flexibility Agreement typically outlines hours of work, rate of pay during overtime, leave loading and allowances. All awards and enterprise agreements must have an IFA clause, so flexible arrangements are always possible. This is regulated by s 144 of the Fair Work Act 2009 (Cth)

What Is An Individual Flexibility Agreement?

According to the Fair Work Act, an IFA allows employees to manage or vary certain terms in their award or enterprise agreement so that their work arrangements are more suited to their needs or preferences. Generally, these arrangements should be beneficial for both the employee and the employer. 

It’s important to note, however, that this should not affect or change the employee’s entitlements under the National Employment Standards

Is This The Same as Flexible Working Arrangements?

The answer here is no, so it’s important not to confuse the two. Flexible working arrangements do not affect the terms in an award or registered agreement, whereas an IFA can (under the Fair Work Act). 

Fair Work has written about this in more detail here

How Does An IFA Affect Employment Entitlements?

Like we mentioned before, an IFA cannot reduce the minimum employment entitlements set out in the NES. For example, an employer or employee cannot request an IFA to reduce personal leave days from 10 to five, in return for additional remuneration.

Benefits Of An IFA

There are many benefits a workplace can receive from having IFAs in place. They provide greater flexibility and working arrangements for employees, they attract and retain staff, and generally they improve job satisfaction and workplace efficiency. 

It’s a great way to show that you value your employees by tailoring work arrangements to their needs, and understanding that not everyone prefers to work the same way. 

How Does The Process Work?

An IFA is made by a mutual agreement. The employer and employee both need to agree to the terms and conditions set out in the IFA, and this needs to be put in writing. 

It’s also crucial that both parties have their own copy of the agreement, with the signatures of both parties (if the employee is under 18, a parent or guardian will need to sign the IFA). 

The IFA should also have terms detailing the process for termination of the agreement (we’ll cover this in more detail later). 

Can An Employee Refuse An IFA?

Yes, each employee has a right of refusal when an employee offers an IFA. This is protected and enforced by the Fair Work Act. In other words, you cannot force an employee to agree to and sign an IFA – both parties need to agree to it. 

To better understand how IFAs work, here are some examples:

Example
Yukio operates a high school tutoring business where one of his employees, Kim, works from 9 AM – 5 PM from Monday to Friday (this is set out in her employment contract). Kim is finding it difficult to work these hours as she is studying a teaching degree part-time and has evening classes three days a week from 5:30 PM. Yukio and Kim agree for Kim to work from 7 AM – 2 PM on those days she has classes and drafts up an IFA. 
Example
Vinh and José both work at Readingz, a publishing company, based in Brisbane. Vinh works as an Editor and José works as a Marketing Manager. However, both are interested in working one day a week in each role to develop new skills. Vinh and José agree with their CEO, Amanda, to draft an IFA to divide their roles into multiple job roles to be undertaken by them and to be paid on a pro-rata basis for the part of the job they each complete.

How Can An IFA Be Terminated?

Generally, an IFA should include a clause that sets out the details around termination and the process to be followed. However, some of the following are simple ways you can terminate an IFA:

  • Written agreement between employer and employee 
  • Appropriate notice (13 weeks under an award)
  • Agreement expires according to the term set out in the IFA

Need Help?

Providing greater flexibility in the workplace for employees with an IFA is a good long-term strategy to improve business performance. If you need help updating or drawing up an IFA, feel free to get in touch!  

You can reach out to our team for a free, no-obligations chat at team@sprintlaw.com.au or 1800 730 61. 

About Sprintlaw

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