Individual Flexibility Agreements – award and EA entitlements: employers should ensure they comply with the Fair Work Act requirements

Industrial Union United Voice is set to challenge the rollout of a series of Individual Flexibility Agreements (IFAs) by Spotless Group to cleaners in Victoria, South Australia and New South Wales in the Federal Court, claiming breaches of the Fair Work Act 2009.

United Voice has alleged that Spotless threatened cleaners with reduced shifts and overtime if they did not agree to proposed IFAs that would have allowed each cleaner and Spotless Group to opt out of parts of the modern award, and, in the process, that Spotless breached the Act by:

• engaging in adverse action;
• exercising undue influence; and
• making false and or misleading statements concerning workplace rights.

Spotless Group has rejected all claims raised. However the prospect of this action raises a number of important issues for employers when negotiating IFAs with employees.

Lessons for Employers

When negotiating an IFA with an employee, an employer should:

• ensure the IFA complies with all requirements of the Fair Work Act and, in particular, that  the employee is better off overall;
• confirm the terms of the IFA are genuinely agreed to by the employee;
• ensure the IFA only amends allowed terms relevant to modern  awards or enterprise agreements respectively;
• negotiate each IFA on an individual basis with each employee;
• ensure employees are not forced to enter an IFA, treated adversely nor discriminated against for refusing to enter an IFA;
• ensure employment is not made conditional upon entering an IFA; and
• be aware that failing to ensure that an IFA complies with the Fair Work Act may result in their business incurring significant civil penalties.