8 May Part-time commission-only arrangements must cease May 8, 2019 By Reef Admin Commission only employment 0 The Fair Work Commission has determined that from 30 June 2019, part-time provisions will no longer be able to be applied to a commission-only employee. Since the Real Estate Industry Award commenced operation in January 2010, it has been permissible for a commission-only employee to be employed on a part-time basis. From 30 June 2019 this will no longer be the case. What does this decision mean for employers? First and most importantly, there's no effect on "wages" as a commission-only employee's remuneration is based solely on results and not on the number of hours they work. The decision only imposes one change of substance. This change concerns how real estate employers will accrue the salesperson's NES entitlements (including things like annual leave, personal/carer's leave and notice of termination of employment). From 1 July 2019, employers will need to accrue a commission-only employee's NES entitlements on the basis that the employee works 38 hours a week (even if a lesser number of hours has been previously agreed). So, irrespective of whether the commission-only employee works eight hours or 60 hours a week, their annual leave entitlement (for example) will accrue as if they work 38 hours a week. The bottom line How employers respond to this decision will depend on a number of considerations. If you're comfortable to accept the increased NES liability, then it will be business as usual. The employee will continue to work their current hours, but their NES entitlements will accrue as if they work 38 hours a week. If, on the other hand, you're unwilling to adopt the increase in the employee's NES entitlements, there will be a need to consider other alternative strategies to manage the problem in order to comply with the law. One such strategy is to discuss the possibility of moving to a part-time salaried arrangement on a debit-credit or target-based commission structure with the salesperson. While REEF is disappointed with the Fair Work Commission's decision on this matter, the impact should be manageable – especially given the strong safeguards under the Award which operate to limit commission-only employment to proven real estate performers. Contact REEF If you need assistance to apply this decision, please call the REEF Helpline on 1300 616 170 to talk to one of our Workplace Relations Advisors. Related Commission-only employees: It's time for their MITA review The Real Estate Industry Award requires employers to conduct an annual review to determine if their commission-only employees can continue to be paid on a commission-only basis. What is the MITA: Qualifying for commission-only employment A new acronym is about to enter the real estate industry's lexicon. From 2 April 2018, references to commission-only employment will be uttered in the same breath as "MITA" – Minimum Income Threshold Amount. Don't be left in the dark: New industry award starts on 2 April 2018 After a long battle, the Fair Work Commission has now finalised the four-year review and the Real Estate Industry Award 2015 will commence on 2 April 2018. Big changes are ahead. Here's what you need to know. Real Estate Industry Award: Out with the old, in with the new After a long battle, the Fair Work Commission has now finalised the four-year award review and the new Real Estate Industry Award will commence on 2 April 2018. Here's what you need to know before the changes kick in. What information must be given to a parental leave replacement employee? REEF Workplace Relations Advisor James Burton answers this important employment question. Fair Work Commission hands down Award review decision The wait is over! The Fair Work Commission has handed down its decision regarding the statutory review of the Real Estate Industry Award. Here are the details. Comments are closed.