Individual Flexibility Arrangements

An individual flexibility arrangement (IFA) is a written agreement between an employer and employee. An IFA varies certain terms of a modern award or enterprise agreement on an individual basis to meet the genuine needs of the employer and the worker.

An IFA cannot reduce or remove the minimum employment entitlements set out in the National Employment Standards. For example, an employer or employee cannot request an IFA to reduce personal leave days (aka sick days) from ten to five, in return for additional remuneration.

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 the employer should consider financial and non-financial benefits for the employee, as well as the employee’s personal circumstances. “Better off overall” might look like:

• A worker starting and finishing work earlier in order to pick up children from school;
• Paying a higher flat hourly rate to incorporate allowances, as long as the employee is ultimately paid more than would have been the case under the defined award arrangements; or
• The ability to bank RDOs rather than take them regularly so these can be taken during school holiday periods.

An employer or employee can ask the other to enter into an IFA. When both parties have agreed on what arrangements they wish to enter into, this 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.

Any fine print around Individual Flexibility Arrangements?

• All modern awards, enterprise agreements and other registered agreements have to include an individual flexibility arrangement (IFA) clause.
• 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. Someone interviewing for a position cannot be forced by the employer to sign an IFA to get the 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.

Bottom line? An IFA can vary certain award terms to “meet the genuine individual needs of the employer and the individual employee” but only as long as the employee is “better off overall” compared to their award conditions.

Individual Flexibility Arrangements are a genuine, low cost way for employers to demonstrate they recognise different people can require different working arrangements, depending on personal circumstances. At Bare Bones Consulting, we’re also flexible in our approach to HR solutions, particularly with development of  low-cost or no-cost strategies that genuinely add value to your business.

Like to know more about IFA’s or other ways you can retain your best workers? Give us a call or shoot us a message through our “Contact Us” page here.