Maria Kovacic (NSW, Liberal Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Hansard source

The Fair Work Commission general manager's 2024 report into individual flexibility arrangements paints a starkly different picture to the one that the minister has set out at the table in this debate. The report observed the following:

… IFAs were not utilised more widely due to a limited understanding and awareness of the entitlement. There was also a concern by employers that an IFA could be unilaterally terminated by the employee, leading to uncertainty.

The data is equally telling. Between 2021 and 2024, most people involved in making or responding to IFAs had experience with only a handful of them, 46 per cent reported just two to 10 arrangements, 15 per cent reported between 11 and 20 arrangements and only 10 per cent had experience with as many as 51 to 100 arrangements. Across multiple sectors, interviewees described the practical difficulty, and indeed the rarity, of actually implementing IFAs. Their words speak for themselves:

IFAs were an area that was often asked about, but more occasions than not, this did not translate into actually implementing the IFA.

Another interviewee said:

… I've worked for this business for 7 years and I can't even remember when we do IFAs … we just don't do them.

Another responded:

I don’t think IFAs have been used properly or they are used in the wrong context. So, I've seen that probably the understanding of when an IFA should or shouldn't be used hasn't always been consistently applied a lot of the time.

A union official conceded that the complexity of IFAs deters employers. They said:

Employers routinely refuse. And I would say that the main reason they refuse is because they don’t understand it. It's too hard. I've got enough things to think about.

Employers also pointed to termination provisions and the uncertainty of passing the better off overall test, particularly when non-monetary benefits were concerned, stating, 'There was uncertainty around the status, and of a non-monetary benefit as whether it was sufficient to hold the validity of an IFA, and so, for that reason, combined with the unilateral termination provisions there was a reluctance to use them.'

The report further highlighted that in some cases enterprise agreements clauses themselves deliberately narrowed the scope of what an IFA could cover, further restricting their practical utility. Against that backdrop the government's repeated assurances that vulnerable workers, particularly women—as I outlined earlier—retain flexibility through enterprise agreements, and IFAs ring quite hollow.

Minister, were the commission's findings showing that the IFAs are rarely used, highly complex and create legal uncertainty considered by the government when they were drafting this bill?