Beware of Wages Paid to Sales Staff
The case of Fair Work Ombudsman v Longridge Pty Ltd involved the prosecution of a building company in South Australia for the underpayment of wages to its sales staff.
Longridge Group was a construction company and employed its sales staff on a commission basis, with no hourly rate of pay. As a result of a complaint made by an employee, the Fair Work Ombudsman (‘FWO’) launched an investigation which uncovered that the employees were entitled to an hourly rate of pay and other minimum employment conditions required by the Fair Work Act. The FWO then undertook prosecution to seek penalties for breach of the Act.
Claims made by the Employees
Pursuant to the Fair Work Act the employees were entitled to an hourly rate of pay and conditions of employment. The FWO and the employer provided the Court with an agreed list of details, including the actual amount of underpayment and the circumstances of employment, which included:
Applicable hourly rate of pay;
The application of the Miscellaneous Award;
A casual rate that varies between 21-23%; and
Penalty rates for weekends and public holidays varying between 125-172%
The employees were respectively owed $20,013 and $11,646 respectively.
In addition to the amount of back pay the employers were liable to the employees the Court imposed a penalty of $29,700 on the building company. The severity of the penalty highlights the importance of employers complying with the requirements of the Fair Work Act. The Court’s decision also highlights that the obligations imposed by the Fair Work Act cannot be excluded by the consent of the employees.
Sales Staff Entitlements
All employees are entitled to:
the conditions of employment prescribed by the National Employment Standards (‘NES’)
the minimum hourly rate of pay in accordance with the requirements set out in the Fair Work Act
Employees may also be entitled to further entitlements under an Award, such as loadings, allowances and penalty rates. Whether an award applies to an employee will be dependent on the circumstances of the employer and employee. Depending on the circumstances, sales staff may be:
covered by the Miscellaneous Award;
covered by the Real Estate Industry Award, if they are contracted to sell land; or
award free and covered by a minimum hourly rate and the NES.
The above case highlights the importance of identifying whether an Award is applicable to your employees.
If you require any further information or assistance in regards to the above topic, please do not hesitate to contact the team at The Quinn Group on (02) 9223 9166 or submit an online enquiry.