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MITA Review Requirements for Commission Only Employees

real Estate

There is a requirement under the Real Estate Industry Award 2010 for all real estate employers to conduct an annual review to confirm that employees engaged on commission-only basis continue to meet the Minimum Income Threshold Amount (MITA) and as such can continue to be paid on a commission-only basis.

If a commission-only employee does not receive gross commission (before tax) of at least $54,578 over the review period (i.e. 2 April 2018 to 1 April 2019), they will no longer meet the requirements to continue to be engaged on a commission-only basis.
Key MITA Review Dates For Employers

For any commission-only employee engaged on or before 2 April 2018:               
The first mandatory review must be conducted by 1 April 2019.

For any commission-only employee engaged after 2 April 2018                         
The first mandatory review must be conducted 12 months after their date of commencement on a commission-only basis. 

What Do I Need to Do?
If you employ salespeople on a commission-only basis, you will need to carefully review your obligations and take appropriate action as required.

The Real Estate Industry Award 2010 requires that every 12 months, a commission-only employee's performance must be assessed against the MITA by their employer.

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. This amount cannot be pro-rated for part-time employees.
What Happens Where an Employee Does Not Meet the MITA Requirements?
Where a commission-only employee does not satisfy the annual MITA requirements, you must cease paying them on a commission-only basis.

The employment relationship will not automatically come to an end simply because the employee has failed to satisfy the MITA review. Rather, the employee must commence being paid wages and allowances (as applicable) in accordance with the Award effective from the date of the review.

Should you continue to employ an individual on a commission-only basis after they have failed to satisfy an annual MITA review, you may face serious penalties for breaching the Award and potential underpayment claims.
Can the Employment Relationship be Terminated if the Employee Does Not Meet the MITA Requirements?
The employment relationship may be terminated, but only once due process has been applied. Terminating any employee without first having followed due process will significantly increase the risk of an unfair dismissal claim, and potentially a general protection claim.

Where you have an under performing salesperson, you will be required to undertake a performance management process with the employee prior to looking to terminate their employment . It is recommended that a process management process commence promptly for any employee who is not meeting the required performance standards.

We recommend that you contact HR Advice Online to obtain advice regarding how to best manage a commission-only employee who has, or is likely to, fall below the MITA.

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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