3 May 2023

Individual Flexibility Agreement

An individual flexibility agreement (IFA) is a legally binding agreement between an employer and an employee that enables them to negotiate variations to certain terms and conditions of the employee’s employment contract. It allows both parties to customize the terms and conditions to suit their specific needs and requirements. 

The IFA is made under the Fair Work Act 2009 (Cth) (the Act) and must meet specific requirements to be valid. The Act requires that the IFA must be in writing, and both the employer and the employee must sign it. Before entering into the IFA, the employer must also provide the employee with a copy of the applicable modern award or enterprise agreement and ensure that the employee understands the impact of the proposed variation. 

An IFA can be used to vary any of the following terms and conditions of the employment contract: 

  1. Arrangements for working hours, including start and finish times, rostering, and overtime. 
  2. Arrangements for working from home or remote locations. 
  3. Arrangements for breaks, including meal breaks and rest breaks. 
  4. Arrangements for payment of wages, including salary, bonuses, and commission. 
  5. Arrangements for leave entitlements, including annual leave, personal leave, and long service leave. 
  6. Arrangements for termination of employment, including notice periods and redundancy entitlements. 
  7. Any other terms and conditions specified in the applicable modern award or enterprise agreement. 

The IFA cannot be used to vary any of the following terms and conditions: 

  1. The national employment standards (NES). 
  2. Occupational health and safety laws. 
  3. Workers’ compensation arrangements. 
  4. Certain prohibited content, such as unlawful discriminatory terms or terms that contravene minimum entitlements. 

The key benefit of an IFA is that it provides flexibility to both the employer and the employee. IFAs allow them to negotiate terms and conditions that suit their particular circumstances.

An employer might offer higher pay for changed hours, while an employee might accept lower pay for remote work or reduced hours.

In conclusion, an IFA is a useful tool that allows employers and employees to negotiate variations to certain terms and conditions of the employment contract. It provides flexibility and enables both parties to customize the terms and conditions to suit their specific needs and requirements.

However, it is important to ensure that the IFA meets the requirements of the Fair Work Act 2009 and that both parties understand the implications of the proposed variations before entering into the agreement. 

Not sure whether or not you need an Individual Flexibility Agreement in your business? Reach out to the Team at Now Actually and we will talk you through the process.  

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