FWC green lights longer individual workplace arrangements

by Stephanie Zillman16 Apr 2013

A full bench decision by the Fair Work Commission (FWC) means employers and employees will now have the freedom to enter into individual workplace arrangements for longer periods before the deals can be terminated.

In a ruling handed down yesterday, the FWC announced its finding that the notice period for terminating an individual flexibility arrangement under the Fair Work Act should be extended to 13 weeks. Previously the maximum arrangement was a period of four weeks, and the decision has been welcomed by employer groups.

“[The] decision by the Full Bench of the Fair Work Commission (FWC) to amend the Award Flexibility Clause in modern awards will increase the utility of Individual Flexibility Arrangements (IFAs) made under awards for employees and employers. While changes need to be made to the Fair Work Act to improve the framework for IFAs, today’s decision is a step in the right direction," Australian Industry Group Chief Executive Innes Willox said.

AiGroup noted the most significant aspects of the decision:

  • The provision which allows either party to terminate an IFA made under the Award Flexibility Clause with 4 weeks’ notice has been extended to 13 weeks;
  • The Commission has left the way open for a Full Bench case to be run to clarify the extent to which ‘employee preferences’ for particular hours of work arrangements can be taken into account in applying the Better Off Overall Test for IFAs (see paragraphs [155]-[158] of the decision);
  • The Full Bench will finalise the Award Flexibility Clause after another Full Bench hears and determines the applications made by the Australian Industry Group and others to vary the Clause to provide for flexibility regarding leave (see paragraph [212]). These applications will be heard on 22 April 2013.

At this stage Willox said Ai Group has proposed a number of additional changes to the Fair Work Act to improve the framework for IFAs including:

  • Allowing IFAs to be made for a term of up to four years, similar to an enterprise agreement;
  • Clarifying that the genuine preferences of employees for particular hours of work are a factor to be taken into account in applying the Better Off Overall Test;
  • Requiring that the flexibility clauses in enterprise agreements permit IFAs to be made about all matters included in the FWC’s Award Flexibility Clause to stop unions insisting upon clauses which do not offer meaningful flexibility, as recommended by the Fair Work Act Review Panel.

"All political parties should support these sensible legislative changes which would benefit employees and employers," Willox said.


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