Commission-only employees: It's time for their MITA review

This annual review ensures commission-only employees meet the Minimum Income Threshold Amount (MITA).

 

Key dates

For any commission-only employee engaged on or before 2 April 2018, the first mandatory performance review is 1 April 2019.

Where a commission-only employee has been engaged after 2 April 2018, their first mandatory review will be 12 months after their date of commencement.

 

Important considerations

If your agency employs a salesperson on a commission-only basis, you need to carefully consider the following information and take appropriate action.

As part of the four-year review of the Real Estate Industry Award, the Fair Work Commission introduced an annual performance review for anyone engaged as a commission-only employee.

The Award requires that every 12 months a commission-only employee's performance must be assessed against the MITA. The MITA is the amount of gross commission (before tax) that a commission-only employee must receive from their property sales during the period (excluding superannuation payments) to enable them to continue on a commission-only basis.

For the review period ending 1 April 2019, the MITA is $54,578 and can't be pro rated for part-time employees.

 

Failure to meet the MITA

Where a commission-only employee fails the annual MITA review, paying them by way of commission-only must cease.

Unless either you or the employee take appropriate action to end the employment, the employment will continue and the employee must be paid wages and allowances from 2 April 2019 in accordance with the Award. The employment relationship will not automatically come to an end simply because the employee has failed to satisfy the MITA review.

If an employee continues to be employed on a commission-only basis after failing an annual MITA review, serious consequences may result for the employer, including penalties for breach of the Award and for underpayment claims.

 

Can I terminate the employment?

Yes, but not before you've undertaken a performance management process with the commission-only employee. If you terminate them without conducting this process, then terminating their employment will carry high risk.

Therefore, if you have an underperforming commission-only salesperson, REEF strongly encourages you to commence performance management as a priority.

Failure to do so will leave you and your agency exposed to a claim of either unfair dismissal or general protections. The penalties in this regard may be severe.

 

The bottom line

If a commission-only employee does not receive gross commission (before tax) of $54,578 over the review period (e.g. 2 April 2018 to 1 April 2019), they are disqualified from continuing to be paid on a commission-only basis.

 

Have questions?

If you're looking for guidance about how to best manage a situation where a commission-only employee's gross income has, or is likely to, fall below the MITA, give REEF a call on 1300 616 170.

 

Commission-only employment fact sheet

You can find out more about commission-only employment and the MITA by reading REEF's Commission-only employment fact sheet. 

You can download a copy of the fact sheet from the REEF People Management System.