Flexibility within agreement may vary effect of agreement

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Flexibility within agreement may vary effect of agreement

FWA has ruled that individual flexibility arrangements in a registered agreement may be used to vary the effect of the agreement, but cannot be used to vary the agreement itself.

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FWA has ruled that individual flexibility arrangements in a registered agreement may be used to vary the effect of the agreement, but cannot be used to vary the agreement itself.
 
A towbar manufacturer lodged an agreement with FWA for approval covering employees at its Melbourne workshop.
 
Background and issues
 
Commissioner Ryan outlined the facts and issue as follows:
‘The IFA [individual flexibility arrangement] in the Illustrative example rewrites the terms of the enterprise agreement in 2 important respects. Firstly, the time worked between 7.30 am and 8.00 am is not paid as overtime but is paid as ordinary time. Secondly the employee does not have to work 37½ hours between 8.00 am and 6.00 pm.
 
The combined effect of the IFA in the Illustrative example is that the employee (Josh) only works 35 hours within the span of ordinary hours set by the agreement and works 2½ hours outside the span of ordinary hours but does so at the ordinary time rate of pay rather than at the O/T rate.
 
Is this an IFA which varies the effect of the terms of the enterprise agreement?
 
It is clearly an IFA which varies the terms of the enterprise agreement. But is this permitted by the specific terms of the Act? …
 
What significance should be given to the phrase “the effect of which may be varied” appearing in both s.144(4)(a) and 203(2)(a) and the corresponding phrase “varying the effect of” appearing in both s.144(1) and 202(1)(a)? ‘
Not within legislation
 
The commissioner noted:
‘… the plain language of s203(2)(a) provides for a significantly lesser possibility, namely varying the consequence or result flowing from the operation of a term of an enterprise agreement but where the varied result or consequence remains within the sphere of operation of the term of the agreement …
 
The model flexibility term set out in the Fair Work Regulations also did not provide for the variation of the terms of an agreement.’
The proper meaning of the Act
 
The commissioner concluded:
‘The plain language of s.202(1)(a) and 203(2)(a) do not permit the terms of an enterprise agreement to be varied, only the effect or consequences of those terms.
 
This interpretation of s.202 and 203 is consistent with and supported by other provisions of the Act.
 
Terms of an enterprise agreement can be varied but only in compliance with Subdivisions A and B of Division 7 of Part 2-4 of the Act
 
Parliament has specifically provided the legislative regime for varying the terms of an enterprise agreement in Division 7 of Part 2-4. With such explicit provisions for the varying of enterprise agreements in Division 7 of Part 2-4 there can be no justification or need to try and read into s.202 and 203 a power to vary the terms of an enterprise agreement …
 
The language of the Model Flexibility Term for enterprise agreements reflects the language of s.202 and 203 and makes clear that an IFA may vary the effect of terms of the enterprise agreement. It clearly does not provide for the variation of the terms of the enterprise agreement.
 
All that the Act permits and in fact requires is that the effect of the award or enterprise agreement terms may be varied by an individual flexibility arrangement …
 
If clause 12.1 had read as:
The effect of the terms in clause 12.4 of the Agreement may be varied by an individual flexibility arrangement (“IFA”) then I would have considered the clause to have met the requirements of s.203…
The absence of the words “the effect of” from clause 12.1 means that the clause is not a flexibility term for the purposes of s.203 of the Act.
 
Accordingly pursuant to s.202(4) of the Act the model flexibility term prescribed in Schedule 2.2 of the Fair Work Regulations 2009 is taken to be a term of the agreement …’
 
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