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Employment contract, agreement or IFA?

An Employment Contract can be verbal or written but it is preferable that it be written so that each party is clear about the terms and conditions which apply. Employment contracts can provide terms which are more beneficial than the award or the National Employment Standards but they should not contain terms which are less favourable. For example, if a contract has a base rate of pay that is lower than the minimum pay rate for that classification in the award, then the award terms will apply regardless of what the contract says. See the section “How do I Employ Someone ?” for contract templates and more information.

An Enterprise Agreement is a formal document which is between you and your employees or a group of employees. The content of the enterprise agreement must be discussed with employees and you are required to give consideration to their views. Enterprise agreements must be assessed and approved by the Fair Work Commission Employees must be Better Off Overall under an agreement than they would be under the relevant award and agreements cannot exclude the 10 minimum conditions in the NES. Enterprise agreements must have an expiry date of no more than four years from the date of approval of the agreement by the Fair Work Commission. If you are thinking of introducing an enterprise agreement into your workplace, see the FWC’s step by step guide to making a single enterprise agreement. You can also access, or apply to vary, existing agreements.

Individual Flexibility Agreements: All modern awards and enterprise agreements contain a ‘flexibility term’ that lets you adjust the award or agreement to best meet the needs of an individual employee. Individual flexibility arrangements (IFA’s) in the modern awards will only allow IFAs to vary arrangements for when work is performed, overtime rates, penalty rates, allowances, and leave loading. All conditions in the Individual Flexibility Agreement must pass the BOOT test and be agreed on by employee. You cannot force someone to enter into an IFA and it cannot be made as a condition of employment. You can send an employee a letter of offer for an IFA using the template provided.