Agencies face heat over staff contracts

Stacey Moseley

Real estate agencies that underpay staff, often by using contractor employment arrangements, are being targeted by two industry bodies.

According to Henry Lewocki, senior industrial officer at the Real Estate Association of NSW (REANSW), agencies in NSW that employ contractors using an Independent Contractors Agreement (ICA) may be breaching the state's Property Stock and Business Agents Act.

“We have raised the issue of contractors with the Fair Work Ombudsman, the Commissioner for Fair Trading and the Australian Tax Office,” he told Real Estate Business.

“Currently, the Commissioner of Fair Trading NSW is investigating, at our request, whether there is a breach of the Act, if a person is employed as a contractor salesperson, or whether a person can be employed as a contractor within the terms and meaning of the Act.”

Mr Lewocki also identified a number of major franchise brands as well as independent agencies that were allegedly involved in pushing employees into contract agreements.

“Our office receives calls almost daily from prospective employees (salespersons) who have been given by their prospective employers, an ICA to sign.

"These ICA's provide that the employee (salesperson) is required to obtain an ABN, invoice the employer for their commissions, obtain their own indemnity insurance, workers compensation etc,” he said.

“In a few cases an existing employee has been advised that their company is not trading so well and that in order to retain their employment, they are to move over as a contractor, and given an ICA to sign.”

“Given the flexibility of the award to employ on commission only, we don't see the need to employ any person as an alleged contractor,” Mr Lewocki added.

The call by the REANSW comes in the same week of a Fair Work case against two Queensland agents who allegedly paid a contractor just $100 for five months work. Fair Work claimed the agent should have been considered an employee under employment law.

At the same time, the Property Sales Association of Queensland (PSAQ) is set to "close the door" on sham contracting as they introduce new measures to catch out non-compliant employers.

“Due to persistent complaints received by the PSAQ from both underpaid employees, and from real estate business owners concerned that competitors’ non‐compliance is providing an unfair commercial advantage, the PSAQ has adopted a new enforcement policy,” Barry Gannon, the Federal Secretary for the PSAQ, said.

Under the new policy, the PSAQ will actively seek out agents who have not received entitlements to which they were due. This especially includes those who were engaged as ‘independent contractors’ or ‘conjunctional agents’ and who would not have qualified for commission‐only arrangements under the award.

In addition to the recovery of entitlements, the PSAQ said it wants monetary penalties be applied to business owners. For failing to register a written agreement or misrepresenting employment as independent contracting arrangement (i.e. a sham), the penalty is up to $33,000.00 per breach. In the case of sham contracting, a penalty will be sought for both breaches, the organisation said.

The PSAQ's policy will come into effect as of April, 1 2012.