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Greg Paterson, Employment Matters in 2011


Greg Paterson, Employment Matters in 2011

As the world of work becomes more complex, every real estate employer must understand their employment responsibilities and obligations. GREG PATERSON, Executive Director of the Real Estate Employers’ Federation of NSW examines some current key employment challenges.

Over the past 5 or so years, the business community has been bombarded with legislative change affecting the workplace. It all started with the WorkChoices legislation in 2006 and has continued with the enactment of the Fair Work Act 2009 and the introduction of minimum employment standards and modern awards in 2010. Paid parental leave, unfair dismissal, adverse action, workplace surveillance, national OHS laws, discrimination/harassment – these are just a few of the employment issues that management is being forced to confront.

Dealing with these issues is not always easy. The laws are comprehensive, complex and often confusing. The consequences however of ignorance (or responding improperly to legislative requirements) can be dramatic. There have certainly been instances where businesses have been forced to fold because employment laws have been breached – either intentionally or, more commonly, as a result of ignorance.

Every real estate agency should take the time to understand or, at the very least, seek advice on its minimum employment obligations. By way of example, a new national award is now in place which regulates the engagement of a salesperson on a commission-only basis. While commission-only employment suits just as many employees as it does employers, there are restrictions on its application. The rules are clear for example, as to the type of employee who qualifies for such employment. An agency which abandons the commissiononly rules for the reason of inconvenience is potentially exposing itself to a costly employment based claim that will invariably be impossible to successfully defend.

Similarly, the laws concerning the termination of an employee’s employment have also undergone significant change in recent times. Unfair dismissal and adverse action claims are clearly on the rise and remain a constant disincentive to staff recruitment. The rules applying to small businesses (those which employ fewer than 15 employees) are different from the rules applying to large businesses with 15 or more employees. It’s important for the agency owner to understand the termination rules that apply to his or her circumstances. It is worth noting that claims of this kind are both costly and time consuming and even more importantly, divert the agent’s focus away from the real business imperatives – to list/sell and manage real estate!

In an incentive driven industry like real estate, it’s unsurprising that the most common employment dispute by far concerns claims over sales commission (both for commission-only and salaried employees). It’s regrettable that such claims would in many cases be avoided if some simple administrative processes were followed. Most importantly in this regard, is to ensure that the agreed commission or incentive arrangement is committed to writing in clear, concise yet unambiguous terms. Apart from being a legal requirement, it makes business sense to have a written agreement that sets out the basis upon which the employee will become entitled to receive commission or a form of incentive payment.

The challenge for every real estate agency is to try and cope with the myriad of legislation imposed upon the business by various levels of government. I hope all agents agree, there is too much at stake to get it wrong!


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Greg Paterson, Employment Matters in 2011