There is a trend for companies to utilise Individual Flexibility Agreements (IFAs) with Modern Awards as an alterative to Enterprise Agreements. Recent developments in the approval process of enterprise agreements with the Fair Work Commission and the subsequent need of ABCC approval of enterprise agreements has resulted in companies considering IFAs. An IFA can avoid a lengthy and evasive process that is occurring with FWC and ABCC approvals. An IFA can provide for variations to the payments in the Award, that may include differing hours of work, wage rates that absorb allowances and provide flat wage models. In brief terms, the advantages of the disadvantages of IFAs can be as follows:
The Award automatically applies to an employer in the absence of an enterprise agreement.
The Award is compliant with the Code for Tendering and Performance of Building 2016. There is no administrative work to be undertaken to achieve coverage for either of these points.
The negotiations can be made with individual employees with no collective bargaining.
The absence of a bargaining period avoids unions seeking to intervene in the process.
The company is always exposed to protected industrial action taken by unions
Most clients prefer the subcontractor having an in term enterprise agreement to avoid protected action.
An Enterprise Agreement can provide for a simplistic pay model that applies to all future employees and may be administratively easier in the long term.
In general terms, IFAs are probably more suited to smaller enterprises as larger employers probably have employee relations and administrative needs that require a binding industrial instrument for future employment.
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