The Australian Fair Pay Commission (Commission) has determined a new piece rate Australian Pay and Classification Scale (Pay Scale) for the real estate sector.
In order to be covered by the Real Estate Agents’ (Commission Only) Australian Pay and Classification Scale, an employee must:
- be covered by the federal workplace relations system;[2] and
- be employed as a real estate agent/salesperson undertaking sales transactions involving an agency relationship.
The Commission is aware that there are factors outside the control of a real estate sales employee in obtaining sales, and that a commission-only arrangement may be unreasonably used by some employers, particularly in relation to the remuneration of inexperienced recruits.
Therefore, in addition to the wage guarantee required by the Workplace Relations Act 1996, the new Pay Scale is only available as an option for employees who have demonstrated sufficient experience and track record to earn commissions in excess of the otherwise applicable minimum basic periodic rates of pay.
The new Pay Scale will be limited to employees who:
- hold the relevant qualifications and/or are properly registered as real estate agents/salespersons; and
- have been performing work as real estate agents/salespersons for at least 12 months; and
- agree in writing to be paid by commission-only; and
- have shown that they are capable, based on their previous sales performance, of earning ‘sufficient income’ under the commission-only arrangements that are set out in the Pay Scale.
Sufficient income is demonstrated where:
IF the commission only arrangements had applied to the employee in any single 12 month period in the five years before entering into the commission-only agreement,
THEN the employee would have earned at least the amount they would have received under their current Pay Scale[3] for the 12 month period immediately before entering the commission-only agreement.
An example of how these calculations can be made is attached.
Where an employee does not agree – and agree in writing – to be employed as a commission-only real estate sales person, they will retain all relevant employment entitlements and not be affected by the determination of the new Pay Scale.[4]
The new Pay Scale does not cover employees:
- who are under 21 years of age; or
- who are engaged as casual employees; or
- to whom training arrangements apply.
Part 2 - How are rates of pay calculated under the new Pay Scale?
Example - Sufficient income calculations
[3] If the employee is not covered by a Pay Scale (eg. was award free prior to 27 March 2006) they are required to be paid, at a minimum, the equivalent of the standard Federal Minimum Wage for the 12 month period immediately before entering into the commission-only agreement
[4] Real estate agents are generally covered by a Pay Scale and entitled to a basic periodic rate of pay. If an employee is not covered by a Pay Scale or other relevant instrument (eg. the employee was award free prior to 27 March 2006) they are entitled to be paid the standard Federal Minimum Wage.