In Part 2 of this 3 part series we detail some important points to remember when implementing an IFA in your workplace.
Individual flexibility agreements (IFA’s) can be very beneficial to both employers and employees in particular circumstances. However, it is important they are prepared in accordance with the requirements in the Fair Work Act 2009 and the relevant award or enterprise agreement.
Rolling out an IFA
Here are the key facts for your consideration when implementing an IFA:
- Either an employee or an employer can initiate a request for a flexibility agreement.
- An employee cannot be forced to enter into an IFA; nor can they be treated adversely or discriminated against for refusing to agree to an IFA.
- An employee should be given sufficient time to consider the terms of an IFA, and be allowed representation when negotiating the agreement.
- An IFA must:
- Only be offered to an existing employee. In other words, an IFA must not be a condition of employment.
- Be in writing, signed by the employer and employee, and include the start date of the agreement.
- Only vary the terms allowable under the relevant award or enterprise agreement. Such terms generally relate to working hours, overtime, penalty rates, allowances and leave loading.
- State which terms are being varied.
- Apply the BOOT (‘better off overall test’), by detailing how the employee is better off overall, compared to the applicable award or enterprise agreement.
- Contain a statement by the employee detailing why they are willing to enter into the agreement, and their belief they are better off overall under the IFA.
- State that either party can terminate the agreement by providing 13 weeks written notice.
Once signed, the IFA will vary the terms of the employment until it is terminated. If the IFA does not comply with the above requirements, the employer may be liable to penalties of up to $10,200 for individuals and $51,000 for body corporates.
In Part 3 of this series, which will be published next week, we will discuss whether an IFA or an enterprise agreement is better for your organisation.