Workplace Agreements – Can an individual contract still be used?
Even though AWA’s are no longer permitted under current workplace laws, employers and employees can still come to an individual arrangement to vary or exclude certain Award or Enterprise Agreement (EA) terms in order to meet the genuine needs of the employer and the employee.
The specific terms which can be varied or excluded are slightly different for each Award and EA, however, typically arrangements can be made to vary or exclude any or all of the following:-
- working hours
- overtime rates
- penalty rates
- allowances
- leave loading
Examples of flexibility arrangements include:-
- where an employee is paid well above the award rate, overtime rates, penalty rates and other allowances can be varied or excluded and the employee will still be better off overall;
- an employee who wants more time off over school holidays can agree to forgo other entitlements and instead accrue RDOs which can be used during school holidays
- an employee who wishes to work a nine day fortnight can make an arrangement to work the same amount of hours spread across the nine days.
Both employers and employees can request that an individual flexibility arrangement be made. For the arrangement to be legal, the following requirements must be met:
- the employee must be better off overall (this is determined by looking at both financial and non-financial benefits to the employee)
- the agreement must be genuinely agreed to by both parties
- the agreement must be in writing and signed by both parties
- there must be a term in the agreement which sets out how the flexibility arrangement can be terminated (many Awards and EAs currently require that
the arrangement must be able to be terminated with 28 days’ notice – however, this timeframe is currently under review and may be extended in the near future in order to give employers more certainty).
Individual flexibility arrangements do not need to be approved by Fair Work Australia and thus, will not be tested unless a dispute arises.
If you have any questions about flexibility arrangements or would like us to draft a flexibility arrangement for you, please do not hesitate to contact us on 07 4944 2000.
