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Flexible Working Arrangements – What You Need To Know

Published April 19, 2016 (last updated June 25, 2020) Author: Employsure
Man Shaking Hand For Flexible Working Arrangements IFA

Flexible working seems to be the hot topic when it comes to a good workplace and/or preferred employee benefits. As an employer, there are many things to consider before confirming or denying individual requests. To help you understand your requirements, we have outlined some key factors below.

Individual Flexibility Agreement

An Individual Flexibility Agreement (IFA) is where an employer and an individual employee (or group of employees) mutually agree to vary their working conditions to allow flexible working arrangements to be introduced, benefiting both the employer and employee.

It is important to note, entering into an IFA cannot be a condition of offering employment, this is usually negotiated and created following the commencement of employment.

Terms that can be varied in an award

When agreeing to an IFA, you can only vary certain terms in any given award, as outlined below. If the term is not listed, it must not be varied.

  • Arrangements for when work is performed, including the span of working hours
  • Overtime rates
  • Penalty rates
  • Allowances
  • Leave loading

Details of IFAs

Modern Awards require IFAs to:

  • identify the terms of the award that will be varied by the IFA
  • be a genuine agreement between the employer and employee
  • ensure the employee will be better off overall than they would have been pre IFA
  • provide details surrounding the termination of the agreement

The IFA must be in written form and signed by the employer and employee (or group of employees), with a copy retained by both parties.

‘Better Off Overall’ (or ‘BOOT’) Test

As an employer, when entering the IFA, you have an obligation to ensure the employee is ‘better off overall’ compared with the previous position they were in.

When determining the IFA, you need to ensure all consideration has been given to the employee’s personal circumstances, along with the monetary and non-monetary benefits they will receive after entering into the agreement.

 Terminating an IFA

An employer or employee can terminate an IFA at any time by providing the other party with written notice. Please note, different notice periods apply for different awards or agreements so be sure to confirm your requirements.

When considering and negotiation the terms of your IFA, it is your responsibility as the employer to ensure the agreement meets the requirements outlined by the Fair Work Act. Failure to do so will render the agreement unenforceable and could result in significant financial penalties.

It is also important to understand that you have the ability to deny flexible working requests from employees if it proves to burden and/or hinder the business and/or other employees. It is however, important to ensure a fair evaluation is conducted when considering all request.

Employsure can assist any business when it comes to considering, negotiating or denying IFAs. By seeking professional advice and support you will have complete confidence you are doing the best by your business and employees. Call Employsure today on 1300 207 182.

About Employsure

Employsure is Australia’s largest workplace relations specialists. We take the complexity out of workplace laws to help small business employers protect their business and their people.

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