The Fair Work Commission has ruled commission-only agents will temporarily have their minimum income threshold amount halved, as the fall-out from COVID-19 continues to impact the industry.
The Real Estate Employers Federation (REEF) won a ruling with the FWC after it noted that many employers would fall short of their minimum income threshold amount (MITA), placing their employment in jeopardy.
The FWC stated that for the purpose of entering into commission-only employment, the MITA has been achieved if the employee can establish that in any consecutive 12-month period in the three years immediately preceding entering into the commission-only agreement, the employee received annual remuneration (including any commission or bonus payments) at least equal to 125 per cent of the employee’s classification rate as specified in clause 14 – minimum rates, calculated as an annual amount, excluding statutory superannuation.
Under the award, where a qualified salesperson is engaged on a commission-only basis, there is an obligation to review their performance after each 12 months of employment to ensure that the MITA has been satisfied for the preceding 12-month period.
However, with the dramatic impact of COVID-19 reducing sales transactions, many employees would fail the minimum standard, with the REEF arguing that the months between May and October 2020 should be disregarded from any commission-only MITA review.
The MITA target amount would then be proportionately reduced by the number of months excluded from the review. By way of example, if the full six months were chosen to be disregarded, the MITA target amount would be halved.
REEF’s chief executive, Bryan Wilcox, said: “This is an important result for both real estate employers and commission-only employees. It will literally throw a six-month lifeline to commission-only employees and will avoid employers having to unfairly judge them on months where their sales performance was negatively impacted by the COVID-19 pandemic.
“Despite the obvious benefits arising from this decision, real estate employers should continue to take great care when undertaking future MITA reviews, as an incorrect MITA calculation will result in a breach of the award.
“The application and subsequent decision demonstrates once again that REEF continues to work tirelessly in representing the interests of real estate employers in matters concerning the employment relationship.”