Employment Information
Before employment commences, a certificate of registration must be obtained from the Office of Fair Trading. Employees are governed by the Property Stock and Business Agents Act and it’s regulations (a copy of the act can be viewed on line by visiting http://www.austlii.edu.au). Click on New South Wales, and then New South Wales Consolidated Acts.
Employees are covered by the Real Estate Industry (State) Award.
The award can be viewed on line by visiting http://www.industrialrelations.nsw.gov.au click awards on line, then chose alphabetical list, click on R then scroll down to the Real Estate Industry State Award 2003.
It is also a requirement under the award that an employee must have an Employment Agreement that is registered with the Association and the Real Estate Employers Federation (REEF) or the Auctioneers and Agents Guild.
It is important to note that commissions are an above the award payment. There is not a “one size fits all” regarding the percentage of salespersons commission paid, in other words, it is subject to negotiation between employee and employer. It depends on the location of the office, the market parameters and the competition.
If a member wishes to seek advice on commission that is being offered as part of their employment contract the Association can provide assistance in this regard.
Below are examples of various systems an employee can be remunerated:
COMMISSION ONLY SYSTEM
There are strict guidelines relating to persons employed on Commission Only. These guidelines are contained in a decision by the Australian Fair Pay commission handed down on the 3rd August 2007. Members can contact the Association for full details or visit the Fair Pay commission website.
TARGET SYSTEM
The target system of remuneration relates to an agreement reached between the employee and employer of commissions paid after a set monetary amount has been achieved.
The basic intention of this system is that the employee is paid at least as a minimum the award rate plus if applicable car allowance and phone allowance as well as commissions, however, they must reach a target of sales and commission paid to the employer before any commission is paid to the employee.
For example:
An employee has a $30,000 quarterly commission target. After reaching the target the employee is then paid an agreed % for any commissions above that amount. In some cases, if the target is not reached in the quarter, the shortfall is carried over to the next quarter. eg if the target was $30,000 but the salesperson only made $25,000, then the next quarters target will become $35,000.
All of this is subject to mutual agreement between the employee and employer and is written in the employment agreement.
DEBIT/CREDIT SYSTEM
This is the most common system used in the industry.
Once again, agreement must be reached between the employee and employer.
This system of remuneration is that the employee receives the award rate plus applicable allowances. The employer can then deduct from the employees commission award entitlements and other agreed amounts. eg non vendor paid advertising, franchise fees etc.
What the commission percentage is, and what can be deducted, from commissions should be clearly written in the employment agreement.
SALARY ONLY SYSTEM
Under this system, the employee only receives a weekly salary and no commissions.
PROPERTY MANAGERS/OFFICERS
Generally speaking, Property Managers and Officers receive a salary and if agreed with the employer, a commission for achieving new managements to the rent portfolio.
OTHER ENTITLEMENTS
All employees are entitled to superannuation, annual leave (except casuals) and long service leave in accordance with government legislation.
Full time and part time employees are also entitled to sick leave, personal carers leave, compassionate leave and jury service.
The award provides for payment of allowances for use of motor vehicles and telephone. There are differing amounts for car allowance which are contained in the award. There is not any specific amount for the use of mobile telephones. This should be negotiated with the employer.
The award does not contain hours of work or on what days work can be performed, however, the hours are covered by the Industrial Relations Act of NSW which is 40 hours per week. The Fair Work Australia Act, the Federal Workplace Relations Act provides for 38 hours per week.
All employees are entitled to 2 days off per week unless otherwise agreed whereby a certificate of exemption must be signed.
If an employee (Salesperson) works 6 days per week they are paid an additional 30% of their salary. If they work 7 days per week with no days off they are paid an addition 45% of their salary.
For additional information view the award on line.