On 6 August 2020, the Fair Work Commission (FWC) made a variation to the Real Estate Industry Award 2020 (the Award) in response to COVID-19.
There were two main changes to the Award:
- firstly, the Commission has made a change to the factors used in calculating an employee’s Minimum Threshold Amount (MITA); and
- secondly, the Commission has changed the rules relating to when an employee is able to transition from salary based employment to commission-only employment.
Minimum Threshold Amount Calculation
Under the Award, commission-only arrangements may cease where an employee has failed to earn a Minimum Threshold Amount over a preceding 12-month period.
The Commission has recognised the impact that the COVID-19 pandemic may have on the real estate industry, for real estate agents and their employees.
In order to provide flexibility for both employers and employees, the Commission has introduced a variation to the Award that essentially allows the parties to disregard the months of May to October 2020 in the calculation of an employee’s MITA.
The Award now states:
The MITA will be adjusted accordingly in proportion to the number of months disregarded, provided that, where the commission-only employee’s review date falls part way through any COVID-19 month, that month may only be disregarded where the review is due after the 14th of the month
On a practical level, this means that real estate agencies may not be required to terminate or cease an employee’s commission-only arrangement because of low sales figures for the months, May to October 2020.
Transitioning to Commission-Only Employment
The second change to the Award is that employees who are not employed on a commission-only basis as of 6 August 2020 shall not then be eligible to be employed on a commission-only basis until 1 November 2020 (at the earliest).
Essentially, real estate agencies are not permitted to transition employees to commission-only salespeople until November of 2020.
These changes are designed to safeguard the jobs of real estate agents.
If you require further information regarding these changes, and / or how they might affect you or your business, please do not hesitate to contact our Workplace Team today for legal advice tailored to your specific situation.
You can read the FWC’s proposed variation here.