Employers and employees in the real estate sector will have the right to agree on commission-only payment arrangements from October 1, when the Australian Fair Pay Commission’s new piece rate Australian pay and classification scale for the sector comes into operation.
The optional piece rate pay scale will be limited to employees who agree to be paid by a commission instead of by the hour; hold the relevant qualifications and/or are properly registered as real estate agents, have been performing work as real estate agents for at least 12 months, and have shown they are capable of earning sufficient income under the commission-only arrangements.
Those employees who agree to be covered by the new pay scale, and satisfy the requirements, will be paid 35 per cent of their employer’s net commission for each property sale.
The decision, handed down by the AFPC last week, follows a review earlier this year by the independent body into pay arrangements in the real estate sector.
Australian Fair Pay Commission chair, professor Ian Harper, said submissions to the commission’s first wage review in 2006 raised issues regarding a range of historical piece rates or commission-based payments in awards.
“We noted in submissions that commission-only wage arrangements were common and well accepted in many jurisdictions in Australia prior to the introduction of the Work Choices legislation,” he said in a statement.
“The submissions also indicated that both employees and employers in the sector sought greater flexibility in pay arrangements.”
Real Estate Institute of Australia president, Graham Joyce, welcomed the decision, saying that with the introduction of the federal minimum wage in March 2006, performance incentives within the industry had significantly diminished in places where ‘commission-only’ payment provision was not preserved in a state or territory award or in a pre-existing AWA.
“The traditional incentive based system shares risk and rewards performance, compared with minimum wage arrangements where risk is borne by the agency, and strong performance by the employee does not attract the maximum reward,” Mr Joyce said.
The commission has also recognised that a range of factors outside the control of a real estate sales employee may impact their ability to obtain sales.
As a result, the commission-only arrangements will not cover real estate sales employees who are under 21 years of age, engaged as casual employees, or to whom training arrangements apply.
