Commission Only Employment
Date: 21 Aug 19
Commission only employment is dealt with in Part 16 of the Real Estate Industry Award 2010. Various changes are made to the legislation from time to time. Whether you are an employer or an employee there is no substitute for reading the award.
There has been some confusion related to recent changes to the award. Among other changes, one of the minimum requirements for commission only employment set out in 16.3 of the Award was changed.
Previously 16(3)(iii) was as follows:
"(iii) the employee has been engaged in property sales or commercial, industrial or retail leasing as a Real Estate Employee Level 2 of higher with any Licenced Real Estate Agent, or was an active licenced estate agent, for at least 12 consecutive months in the 3 years prior to entering into a commission only agreement;”
The new version applicable from 30th April 2019 is as follows:
“(iii) the employee has been engaged in property sales or commercial, industrial or retail leasing as a Real Estate Employee Level 2 of higher with any Licenced Real Estate Agent, or has operated his or her own real estate business, for at least 12 consecutive months in the 3 years prior to entering into a commission only agreement;”
Presumably this change was because “was an active licenced estate agent” was a little vague and “has operated his or her own real estate business” is more specific. However, it does not mean that to be eligible for commission only employment the person must previously have operated their own business.
Minimum Income Threshold (MITA)
To commence commission-only employment a person must, unless they were previously operating their own business, have achieved the Minimum Income Threshold Amount (MITA) in any consecutive 12-month period in the preceding 3 years.
Once employed on a commission only basis the MITA must continue to be achieved, so performance must be reviewed on a 12-monthly basis. If the threshold is not achieved the commission only arrangement must cease.
The MITA is 125% of the employee’s classification rate as specified in clause 14.1 calculated as an annual amount, excluding statutory superannuation.
Superannuation for Commission-Only Employees
The employer superannuation contribution must be paid in addition to the commission earned under a commission only employment arrangement.