Award modernisation update – Real Estate Industry Award 2010

On 25 September 2009, Fair Work Australia, in its transitional role as the Australian Industrial Relations Commission (AIRC), released an exposure draft of the Real Estate Industry Award 2010 (‘the Award’).  The Award will commence operation from 1 January 2010, subject to transitional provisions which will commence from 1 July 2010.

The AIRC has invited submissions and feedback on the Award by 16 October 2009 and will hold consultation hearings on 4 and 5 November 2009.

Coverage of the Award

The Award introduces, for the first time, federal award coverage in Victoria.  Whilst New South Wales, Queensland, South Australia and Tasmania have had state award coverage in the real estate industry, Victorian employees have only been regulated by the following:

• the minimum rates under the Property and Business Industry Sector;
• the Commission-only Australian Pay and Classification Scale; and
• the Australian Fair Pay and Conditions Standard.

Importantly, the AIRC has determined that the Award will not apply to clerical employees in the industry, who will instead be covered by the Clerks – Private Sector Award 2010.  In addition, high income employees who meet a prescribed income threshold will be excluded from award coverage.

As is currently the case, the Award will not apply to any employers who have registered workplace agreements in place, save that these employers will need to meet the minimum wage rates under the Award.

Terms and Conditions of the Award

The Award applies to full time, part-time and casual employees (who receive a 25% casual loading) and provides for the following minimum rates of pay:

Classifications	Wage rates (weekly)
Property Sales Associate	$543.90
Property Sales Representative	$578.36
Property Sales Supervisor	$669.18
Property Strata Management Associate	$583.30
Property Strata Management Representative	$617.88
Property Strata Management Supervisor	$713.26

These wage rates commence under the transitional provisions in the Award from 1 July 2010, and will be subject to an increase by the Minimum Wage Panel of Fair Work Australia on or around that time. The transitional provisions provide that any increases under these wage rates will be phased in over a 5 year period.

The Award makes clear that any employees who receive payment of wages by way of commission/bonus or incentives (including by commission only) must have such arrangement evidenced by written agreement with the employer.

Under the Award, it is possible to employ employees on a commission only basis, subject to the following requirements:

• The employee must have a real estate licence and must have been a real estate salesperson for at least 12 months in the last 5 years
• The employee must be at least 21 years old and not a casual employee or property sales associate
• The employee must demonstrate that in the past 5 years they have in any single 12 month period been able to achieve the defined minimum income threshold under the Award
• The employee is entitled to a minimum commission only rate of 35% of the employer’s net commission

Superannuation is excluded from commission only schemes and as such, commission payments based on performance will continue to attract superannuation pursuant to the provisions of the Superannuation Guarantee and Administration Act 1992.

Other significant parts of the Award are as follows:

• Hours of work – 38 hours for a full time employee averaged over a 8 week period
• Whilst the Award does not provide for penalty rates for Saturday and Sunday work, it prescribes that employees must receive either 1.5 or 2 days off per week
• Overtime will be payable at 150% within the first 2 hours and 200% thereafter, where such overtime is worked by employees on their scheduled days off at the “specific direction” of the employer.  Where employees volunteer or elect to work additional hours, no payment is made under the Award
• Annual leave – under transitional arrangements, annual leave loading will only be paid on accrued leave taken and, in any event, is not payable in the ACT, Northern Territory, South Australia, Victoria or Western Australia until 31 December 2014

It is important that all real estate employers are aware of the implications of the Award and the Clerks – Private Sector Award 2010 from 1 January 2010.  As with all awards, options exist for real estate industry employers to enter into enterprise agreements with their employees to override these modern award conditions.

Further updates will follow once the exposure draft has been finalised by the AIRC.

If you have any questions regarding this update, please contact a member of the Workplace Relations team to discuss.

Author:  Adrian Wong