Update to IFAs

The Fair Work Commission has ruled that existing individual flexible arrangements (IFA) will not be subjected to the extended 13-week notice period as determined in the Commission’s April 2003 judgment. 

The Commission heard a number of applications to vary the standard flexibility provisions in April 2013 in the context of a review of all modern awards. A significant decision by the Commission was to vary the period of notice required to unilaterally terminate an IFA. Previously, the clause had provided a four weeks’ notice period for termination by an employer or employee. The Commission found that this was a disincentive and was persuaded to extend the notice period required for unilateral termination from 4 weeks to 13 weeks. 

The Department of Employment soon alerted the Commission to a potential ambiguity with the draft determinations concerning the new 13-week notice period for the unilateral termination of an IFA. The concerning factor was whether the extension applied to all IFA including those commencing prior to April 2013 and the commencement date of the determination. 

The Commission found that to apply the extended notice period to existing IFAs “would have the affect of varying a fundamental term of those agreements – it would vary the terms of the bargain struck by the parties to the IFA”. Consequently, the determination did not apply to IFAs entered into prior to the commencement date. 

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FWC ruling on IFA notice periods