On 5 August 2020, the Fair Work Commission made a determination to vary the Real Estate Award. Schedule I has now been inserted to temporarily allow additional award flexibility during the coronavirus for commission-only arrangements.
These changes apply to the first full pay period on or after 6 August 2020 for employers and employees covered by the Real Estate Award.
As this information from FairWork.gov.au states:
“Under Schedule I, if a commission-only employee’s work has been impacted by coronavirus, then new rules apply to the calculation of their Minimum Income Threshold Amount (MITA).
If the annual review of their commission-only arrangement occurs after 6 August 2020, then the calculation can be adjusted to exclude the months of May to October 2020. This applies so long as the employee’s work in those months has been impacted by coronavirus.
When making a MITA calculation, the calculation needs to be adjusted accordingly in proportion to the number of months excluded. If an employee’s review date falls partway through a month between May and October 2020, that month can only be excluded if the review is due after the 14th of that month.”
This example sets it out clearly:
Geoff is a commission-only sales representative. His annual review is due on 10 September 2020. Sales in his area were impacted by coronavirus in May, June, August and September 2020.
When Geoff’s income is calculated for the review, his commissions from May, June and August 2020 aren’t included. His commission for the month of July is included because his sales for this month weren’t impacted by coronavirus. The commission for the month of September can’t be excluded because the annual review is due before the 14th of that month.
His income for the rest of the year is compared to the MITA that would apply for the remaining 9 months.
Importantly, employees can’t be employed as commission-only from 6 August until 1 November, if they weren’t already employed on that basis on 6 August 2020.
Information provided under Creative Commons by © Fair Work Ombudsman www.fairwork.gov.au
If you’ve got questions on how these award changes apply to your business, be sure to speak to our Workplace Partners ASAP.