Fair Work Commission Amends Individual Flexibility Arrangement Clause in Modern Awards

10th September 2013

The Fair Work Commission has issued draft determinations to vary the individual flexibility arrangement (IFA) clause in all modern awards. It is seeking comments before finalising the amendments on 27 September 2013.

The IFA clause in modern awards was designed to allow an individual employee and employer to agree to vary the application of certain terms of an applicable award to meet the genuine needs of the employer and the employee. The terms the employer and the individual employee may agree to vary are those concerning:

1. arrangements for when work is performed;
2. overtime rates;
3. penalty rates;
4. allowances; and
5. leave loading

The variation to the standard provisions contained in the IFA clause of modern awards are minor changes that will do very little to improve flexibility in the way in which employees may be engaged to suit the needs of the employers and employees. For example, the variation makes it even clearer that an IFA can only be entered into after the individual employee has commenced employment with the employer. An offer of employment that requires a prospective employee to agree to an IFA forgoing leave loading, allowances and overtime for a higher salary, for example, is not allowed.

However, it does increase the notice period to terminate an IFA from four weeks to 13 weeks. This does provide a more reasonable time frame for employers to re-adjust operations if the employee decides to revert to the standard award arrangements.

If you currently have an IFA with an employee you do not need to amend it. However, if you wish to take advantage of the 13 weeks’ notice of termination then you should amend the IFA. Please contact me if you need assistance.