MITA Review is Coming Up, are your Contracts up to Date?
Senior Associate Workplace Relations
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 2020 requires that every 12 months (from 2 April 2021 onwards), a commission-only employee’s performance must be assessed against the minimum income threshold amount (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 2021, the MITA is $57,044. This amount cannot be pro-rated for part-time employees.
Due to the COVID-19 pandemic, changes were made to the MITA which has meant that the months between May and October 2020 can be disregarded from any commission-only MITA review.
This means, that the MITA can be reduced to a potential minimum amount of $28,522 for the period ending 1 April 2021.
Where a commission-only agent fails their annual MITA review, the employer has two options:
- Immediately move the agent to a salaried arrangement – This means the agent is entitled to receive a minimum award wage, allowances and other entitlements. An agreed commission structure may be included in the arrangement, though this isn’t mandatory.
- Take steps to terminate the employment – A commission-only agent can be terminated where they fail an annual MITA review, but only after following a formal performance management process. If an employer terminates the agent without conducting this process, then terminating their employment will carry significant risk; for example a potential unfair dismissal claim.
If you require any assistance with the MITA review as well as managing of employees please contact REEFWA on 9365 7510 and you will be able to speak directly with an employee relations consultant.