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RE/MAX Western Australia managing director Geoff Baldwin has slammed the government’s proposed Fair Work Act as being an impediment to the employment of new agents.
As of 1 January 2010, Fair Work Australia will replace the seven existing workplace relations agencies and implement a national set of awards including a base wage that is to be paid to all real estate agents across Australia.
Western Australian real estate agents currently work under a commission only based model, however, this is set to change under the incoming legislation.
Mr Baldwin said the real estate industry had long been an incentive based sector that attracts people who wish to bank on their own abilities then enjoy the rewards of that endeavor.
“Employing a real estate salesperson is certainly not like giving a job to a conventional employee where they are required to do set tasks and the employer has some guarantee of a return on their investment,” he said.
According to Mr Baldwin, real estate agencies would be less likely to hire new staff because they would be forced to pay a mandatory wage and foot the cost of training any new employee.
“Even without a wage, the costs of training, supporting, administering and providing marketing to a new entrant to the industry are enormous so the enforcement of a substantial award wage can only set a barrier to future sales prospects,” he said.
But according to the Real Estate Institute of Australia president David Airey, rather than reducing the number of new agents, he believed the new award wage model would benefit employees and employers alike.
“Under the new legislation, an agent from NSW will receive the same award wage as an agent from WA and this is ultimately good news for the industry,” Mr Airey told Real Estate Business.
Mr Airey said that a lot of people were of the assumption that commission-only pay structures will not be available under the new legislation however this is simply not the case.
“Agents will be able to choose which model they work underneath.”
“Most agents will not even notice a difference. It will give young people looking to get into the industry an incentive to do so. I believe it is the best thing to have happened to the real estate industry as it will create an even playing field amongst all agents,” Mr Airey said.
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