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Real Estate Industry Guide

Introduction

The real estate industry provides services that are associated with the sale, acquisition, leasing and/or management of leasehold or real property and/or businesses, including residential, commercial, retail, industrial and recreational properties/businesses, hotels and retirement properties/businesses.

Such services may include:

  • real estate agencies
  • business and hotel broking
  • strata and community title management
  • buyers' agencies
  • real estate valuation.

In addition to providing a broad range of services, the real estate industry employs individuals in a range of roles, varying from reception and administration through to sales representatives, property management and licensees. Employers in the real estate industry and their employees who fit within the classifications of the award are covered by the Real Estate Industry Award. Employees covered by the Real Estate Award include:

  • property sales associates, representatives and supervisors
  • property management associates, representatives and supervisors
  • strata / community title management associates, representatives and supervisors
  • licensees-in-charge and agency managers.

Given the nature of the industry, Real Estate employers may face a number of unique challenges in regard to managing their employees. The industry as a whole tends to operate in a dynamic, fluid and often complex environment, and can be affected by several external factors such as fluctuations in the economy, interest rates and demographics.

Being a sales-driven industry, employees may be employed on a salaried basis (commonly with an additional incentive structure), or in some instances, on a commission only basis (including retainer based debit/credit arrangements). Depending on the nature of the employment relationship and how the employee has been engaged, the entitlements and allowances that may apply to an employee can vary depending.

This guide outlines the entitlements and conditions that apply under the Real Estate industry Award 2020.

Award Coverage and Employee Entitlements

There are two Modern Awards which commonly apply to employees engaged in the Real Estate Industry.

The applicable Awards are:

  • Real Estate Industry Award 2020 – covers roles such as Real Estate Salespeople, Property Managers
  • Clerks Private Sector Award 2020 – covers roles such as Receptionists, Administration Assistants

An overview of the Clerks Private Sector Award 2020 can be found under the Clerical and Administration Industry Guide.

It is important to note however that at times, there may be other Awards which could apply to certain roles within the Real Estate Industry. It is important that each position is reviewed against award coverage provisions and classification descriptors to ensure that your employees are being engaged under the correct Award.

While this document provides an outline of the provisions which apply under the Real Estate Industry Award 2020, it is essential that you do refer to the full Award document for specific provisions which may apply.

Employee Classifications and Minimum Rates

How to determine position classification levels

The Real Estate Industry Award 2020 contains a set of classification descriptors which set out details of what types of functions may be undertaken at each classification level.

It is important to note that the responsibilities, job titles and duties listed under each classification in an Award are indicative only and serve to provide a useful guideline for matching each position within your business to a classification within the Award. An employee does not need to perform all of the tasks, job titles or duties listed to fit within a given classification.

How to locate minimum rates

The current minimum base wage rates can be found in the Real Estate Industry Award 2020 or the Real Estate Industry Award 2020 Pay Guide. Both documents are available from the Resources section of our website (www.hradviceonline.com.au).

Commission, bonus or incentive payments

In addition to the minimum weekly wage, an employer and employee may agree that an employee will be entitled to a portion of the commission paid to the employer. Any method of calculation or formula for calculating the amount of commission that will be payable to the employee must be evidenced in a written agreement between the employer and the employee.

Where it has been agreed between the employer and the employee that the employee will be entitled to a bonus or an incentive payment (as opposed to commission) particulars of the bonus or incentive payment entitlement must be evidenced in a written agreement between the employer and the employee.

Where an employee is entitled to receive any commission, bonus, or incentive payment in accordance with a written agreement made under the Award, payment to the employee is to be made within 14 days of the entitlement becoming payable.

The employee’s entitlement to commission, bonus or incentive payment only becomes payable once the employer has received cleared funds from its client for the transaction(s) to which the employee’s entitlement relates.

Following cessation of employment, in certain circumstances (set out in clause 16.4 of the Award) the employee will be entitled to be credited with a portion of the commission, incentive payments or bonuses calculated in accordance with the terms of the written agreement.

Hours of work and overtime

Ordinary hours of work

The maximum ordinary hours of work are 38 hours per week. Ordinary hours may be worked at any time on any day of the week.

Under the Real Estate Industry Award 2020, hours of work may be averaged over an 8-week period, however the average weekly hours over the period must not exceed:

  • 38 hours for a full-time employee; or
  • the lesser of 38 hours and the employee’s ordinary hours of work in a week for a part-time employee.

An employee (other than a casual) will be allowed either one and a half or 2 rostered days free of duty each week. Rostered time off may be taken as:

  • one consecutive period;
  • 2 periods; or
  • 3 periods comprising one day and 2 half days.
Overtime

Employees are entitled to receive overtime rates if their employer gives them an express instruction to work more than the maximum number of ordinary hours of work per week.

Employees are not entitled to overtime rates if they work more than the maximum number of ordinary hours at their own initiative.

An employee and employer may agree in writing to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee.

Meal breaks

No employee will be required to work more than 5 hours without an unpaid meal break of at least 30 minutes duration.

Where the employee’s rostered hours are not longer than 6 hours the employee may elect, with the employer’s approval, to not take a meal break.

Meal breaks are unpaid and not treated as time worked.

Employment Types

Employees can be engaged on either:

  • Full time basis (ongoing or fixed term)
  • Part time basis (ongoing or fixed term)
  • Casual basis (A minimum engagement period of 3 hours per shift applies for casual employees)

All employees are entitled to receive the minimum weekly rates as set out in the applicable Award.

However, the Real Estate industry Award 2020 does provide that eligible employees may be engaged on a Commission Only basis.

Commission Only Employment (including Retainer)

Commission Only Criteria

Under the Real Estate Industry Award 2020, a person may only enter into an agreement to be a commissiononly employee when all of the following conditions have been satisfied:

  1. the employee and the employer have made a written agreement as provided in clause 17.1 that the employee will be remunerated on a commission-only basis setting out the basis upon which the entitlement to commission will be calculated as provide in clause 17.1;
  2. the employee has been issued with a real estate agent’s license or is registered or permitted to perform the duties of a real estate salesperson under real estate law;
  3. the employee has been engaged in property sales or commercial, industrial or retail leasing as a Real Estate Employee Level 2 or (with any licensed real estate agent) or was an active licensed real estate agent for at least 12 consecutive months in the 3 years immediately prior to entering into a commission-only agreement;
  4. the employee is at least 21 years of age;
  5. the employee is not engaged as a casual, a junior, a Real Estate Employee Level 1 or a trainee; and
  6. for an employee employed on a commission-only basis after 2 April 2018 the employee can establish (with the present or any past employer) that he or she has achieved the Minimum Income Threshold Amount (MITA) prescribed by clause 16.4 (as may be amended from time to time). Provided that, the MITA will not have to be achieved in circumstances where the employee has operated his or her own real estate business within the last 3 years.

An employee who qualified to be employed on a commission-only basis under this award prior to 2 April 2018 will continue to be eligible for commission-only employment under the terms of this award as long as the employment with that employer continues, and subject to continuing to meet the MITA as required.

MITA or Minimum Income Threshold

By 1 April each year, employers need to calculate all commission employee earnings and if they have not earned at least 125% of the Level 2 (Representative) rate or relevant classification level of the award– the employee MUST come off commission only employment and be put on salary.

Minimum Commission Rate payable

A commission only employee is required to receive a minimum of 31.5% of the gross employer commissions.

Deductions

The award as of 2 April 2018 does not provide for deductions to be made from commission payments for advertising costs etc.

Allowances

Minimum allowance provisions in the Real Estate Industry are:

Motor vehicle allowance

If the employee is required to use their own motor vehicle in the course of employment, the employee must be reimbursed for the use of their motor vehicle in accordance with the applicable Award.

Under the Real Estate Industry Award 2020, the car allowance can be paid as follows:-

Per Kilometre Rate

  • Payment of $0.78 per kilometre up to a maximum of 400 kilometres per week.
  • Payment of $0.26 per kilometre up to a maximum of 400 kilometres per week if riding a motorcycle or scooter.

Employees in receipt of a per kilometre rate are required to keep a logbook detailing vehicle usage

OR

Lump Sum Allowance

If the employer and employee expressly agree in writing, a weekly lump sum payment as set out in the table below calculated by reference to the age and engine capacity of the vehicle:

Age of Vehicle Engine Capacity Lump Sum Rate Per Week
Up to 5 Years Old Up to and including 1600cc $146.15
Up to 5 Years Old 1601cc up to and including 2600cc $187.91
Up to 5 Years Old Over 2600cc $203.57
Over 5 Years Old Up to and including 1600cc $109.61
Over 5 Years Old 1601cc up to and including 2600cc $140.92
Over 5 Years Old Over 2600cc $167.03

OR

Standing Charge plus KMs

This option provides a set standing charge per week plus a per kilometre rate. The employee would be required to keep a logbook (as detailed in Per Kilometre) to enable payment of kilometre rate.

Age of Vehicle Engine Capacity Standing Charge per Week Rate per Kilometre
Up to 5 Years Old Up to and including 1600cc $79.60 $0.13
Up to 5 Years Old 1601cc up to and including 2600cc $109.10 $0.15
Up to 5 Years Old Over 2600cc $113.52 $0.17
Over 5 Years Old Up to and including 1600cc $40.45 $0.13
Over 5 Years Old 1601cc up to and including 2600cc $60.55 $0.15
Over 5 Years Old Over 2600cc $66.03 $0.19

A full-time employee may be reimbursed for the use of their vehicle for the days only where the vehicle is required to be used to perform duties under this award at the direction of the employer. Provided that, where the vehicle is used on 3 or more days in any week, the full weekly rate will be payable for that week.

Part-time or casual employees are entitled to be paid a motor vehicle allowance will have the entitlement calculated on the basis of one fifth of the appropriate standing charge or lump sum rate for each day worked.www.hradviceonline.com.au Version 1.0 - May 2021 1300 720 004 7

The motor vehicle allowance is not payable where:  

  • the employee is absent from duty without the consent of the employer;
  • the employee is on any period of paid and/or unpaid leave;
  • the employee is unable to perform his or her duties under this award due to the loss of their driver’s licence; or
  • the motor vehicle is unavailable due to accident or mechanical defect, provided that such payments will be payable for any day on which the employee provides an alternate motor vehicle for the purpose of performing their work-related duties
Mobile telephone allowance

Where the employer requires the employee to use the employee’s own mobile phone in the course of employment, the employer and employee must agree in writing on the amount of reasonable reimbursement payable by the employer to the employee for the use of the employee’s mobile phone.

Such reimbursement must not be less than 50% of the cost of the employee’s monthly mobile phone plan, up to a maximum monthly phone plan of $100.00.

Where the mobile phone is a pre-paid mobile phone, the employer and employee must agree in writing on the amount of reasonable reimbursement payable by the employer to the employee for the use of the employee’s pre-paid mobile phone.

The mobile phone allowance is payable during the entire period of employment, except when the employee is on any period of leave either paid or unpaid.

If requested, the employee must provide the employer with a copy of the mobile phone plan associated with the mobile telephone to be used by the employee in the course of employment.

Uniforms

If the employer requires the employee to wear a uniform, the employer will either pay for or provide the uniform. The basis on which the uniform is provided, including what constitutes the uniform, will be at the discretion of the employer.

The care, laundering and dry cleaning of the uniform will be the responsibility of the employee.

Expenses

An employee who incurs any work-related expenses at the request of the employer will be reimbursed by the employer. Where reasonably practicable, expenses are to be paid in advance.

If you require assistance with managing employees within Real Estate, or if you require HR Advice, please contact the team at HR Advice Online on 1300 720 004.

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.

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