What is an individual flexibility arrangement?
An individual flexibility arrangement (IFA) is a written agreement between an employer and employee. It varies the effect of an award or enterprise agreement on an individual basis to meet the genuine needs of the employer and the employee.
All awards and enterprise agreements must include an IFA clause.
Who can ask for an IFA?
Either an employer or an employee can suggest an IFA. Both parties must agree to the arrangement and sign a document which is legally binding.
What can an IFA change in an enterprise agreement?
The Fair Work Act 2009 (FW Act) provides that a flexibility term in an enterprise agreement can vary any term or condition permitted in the enterprise agreement. It must result in the employee being better off overall than they would be if no arrangement was made.
The terms and conditions that can be varied in any given agreement depend upon the scope of the agreement’s IFA clause. Paragraph 41 of the Workplace Bargaining Policy 2018 encourages agencies to consider a broad range of terms and conditions to vary to suit their specific business needs.
For example, an employee may wish to request an IFA to increase their annual leave entitlement in exchange for less remuneration. Alternatively, an employer may wish to use an IFA as a retention tool to provide additional remuneration and/or conditions to a highly skilled employee.
What can’t an IFA change in an enterprise agreement?
An IFA cannot reduce 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 from 10 to five, in return for additional remuneration.
Importantly, an employer has to make sure the employee is better off overall with the IFA than without it compared to their enterprise agreement at the time the IFA is made.
What is the length of an IFA?
Typically an IFA is used for a particular purpose and to meet a particular need and for this reason they are not usually ongoing. IFAs should be regularly reviewed to determine if they are still meeting the genuine needs of both parties.
An individual flexibility arrangement ends when:
- either party unilaterally ends the IFA by giving no more than 28 days written notice, as prescribed by the FW Act;
- the employer and employee agree in writing to end the IFA – at any time;
- if an expiry date has been specified in the IFA; or
- the enterprise agreement no longer applies to the employee, such as when a new enterprise agreement commences
The Fair Work Ombudsman website contains further information on the use of IFAs.
A note for employees
For specific information on IFAs in your agency, please contact your Human Resources area.