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Ask Ed: Is it necessary to have registered work agreements for sales people in real estate?

Ask EdJune 29, 2015

Ask Ed: Is it necessary to have registered work agreements for sales people in real estate? (Last Updated On: February 8, 2019)
Client Query

Hi Ed – I’m wondering if it’s necessary to have registered work agreements for sales people in real estate? Or do we, the employer, and the employee just have a signed work agreement, each keeping a signed copy?

Ed’s Answer

Hi and thanks for writing in. This question is one I’m sure many organisations, both in the Real Estate industry and otherwise, consider.

No, it is not necessary to have a registered work agreement (commonly called an Enterprise Agreement) for sales people in the Real Estate industry. Employers are generally not obligated to negotiate or enter into an Enterprise Agreement unless the majority of employees are pushing for change.

To clarify further, an Enterprise Agreement is a negotiated agreement between an employer and their employees to outline minimum employment conditions. Rather than entering into this, employers can use the relevant modern award to determine these entitlements. Compiling all employee entitlements into one comprehensive agreement may seem like a good idea, but there are some risks employers need to be aware of, which include:

  • the requirement to ensure that employees are ‘better off overall’ than under an award. This can increase the likelihood that the employer will be obliged to pay employees above modern award rates of pay; and
  • employers must also comply with strict processes and it is common for unions or other employee representatives to become involved in the negotiating process

On an individual employee basis, it is always highly recommended that contracts be utilised to record the agreement between employers and their employees. For the Real Estate industry in particular, this can be crucial as the Real Estate Industry Awards 2010 allows for commission-only arrangements, whereby the employee does not receive a base salary but only sales commission. If commission only arrangements are being utilised, these should be set out clearly in a contract of employment. It is also essential that employers are aware of the provisions under the award in order to protect against a risk of underpayment claims.

In addition, rather than entering into an Enterprise Agreement, an individual contract of employment can also be used for matters not covered by the award, or to provide benefits that step outside of the minimum employment conditions in the award.

Until next time.

 

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