Did you know that if you decide to pay your staff at a higher pay rate than the Award rate, pay more than the Award allowances or alter working conditions but most Awards state that you must have an IFA in place signed by both you and the employee.  The IFA will spell out for the employee how they will be better off than if they were paid under the Award.  An employee must understand the difference between what you are paying them and what the Award rates would be.  The IFA can be altered at any time and it allows employers to pay a combined hourly rate instead of processing weekly or fortnightly payments for different allowances and overtime.  Having an IFA in place can also have a good impact on staff retention, efficiency, productivity and overall job satisfaction.  It also makes staff feel valued and they’re more likely to recommend you as a great employer.

An employee can refuse to sign an IFA and they are protected by the Fair Work Act, so an employee cannot be forced to agree to and sign an IFA – both parties must agree to it.  Here’s a couple of examples of how an IFA might work:

• Danny has a manufacturing company in Perth and he wants to pay an increased hourly rate that includes a small portion of regular overtime worked each week and all allowances. He proposes this to his employees that he would like to include all of their regular overtime and allowances into their hourly rate and he will also include an additional 2% to their hourly rate so they are paid above the Award rate. The employees agree and Danny prepares an IFA for each of them for their consideration and acceptance. Because Danny consulted with his employee first his employees understood what he wanted to do and they knew that they would be better off.

• Jay and Flynn both work at Ash Pools & Servicing based in Brisbane. Jay works as a Pool Cleaning Technician and Flynn works in pool construction. However, both are interested in working one day a week in each other’s role to develop new skills. Jay and Flynn discuss this with their manager and the manager agrees to draft an IFA to divide their roles into multiple job roles to be undertaken by them and to be paid on a pro-rata basis for the part of the job they each complete.

You can cancel an IFA but it must be in writing and the notice period must be 13 weeks under an Award.

Providing greater flexibility in the workplace for employees with an IFA is a good long-term strategy to improve business performance so if you need help with an IFA or understanding more about how it can help your business please get in touch.