The Australian Federal Government’s new workplace relations changes, known as WorkChoices, have now been introduced and have caused quite a bit of controversy and confusion, from both employees and employers. Here we look at what WorkChoices could mean for your brokerage business, especially with regard to commission only brokers.

Commission only brokers
According to the Federal Government’s WorkChoices website, “Under WorkChoices, the arrangements for existing employees who were paid on a commission only basis will continue largely unchanged.”

Existing employees who agreed to an award to provide for commission only pay will be guaranteed the commission rate specified in the agreement under the applicable Australian Pay and Classification Scales (APCS). And for new employees, if they are covered by an APCS that guarantees them a basic commission rate; the employer must pay at least that commission rate to satisfy the wage guarantee .  

However, the Finance Brokers Association of Australia (FBAA) has raised concerns, “if a company’s commission only brokers turn out to be employees, it might have to pay them $12.75 for every hour they spend chasing sales on top of the commission...”

Are commission only brokers considered employees?
According to the FBAA, “A worker who is directed and controlled and told what assignments to work in what area and using a car provided is more likely to be an employee than a worker who is an expert in the area, who does their own work their own way, using their own car, at the times and in the ways that they decide themselves, especially if they have a clear written contract that accurately reflects the true nature of their engagement.”

There may not be an easy clear-cut answer to whether your commission only brokers are independent brokers or employees of your broking business. If in doubt, you should seek legal advice.

Entitlements for employees of a broking company
Brokers trading through a company will now have to offer the following entitlements to all employees:

• parental leave
• annual leave
• personal leave
• maximum ordinary hours, and
• basic rates of pay.

Unfair dismissal
WorkChoices also brings changes to the unfair dismissal laws for employers with 100 employees or less. But again, these changes have caused confusion following the introduction of the WorkChoices legislation.

Employers with 100 employees or less will now be exempt from unfair dismissal laws. Under certain circumstances though, employees may still be able to lodge a complaint with the Australian Industrial Relations Commission (AIRC) for unfair dismissal.

It will also remain unlawful to dismiss an employee on discriminatory grounds based on age, race, sex, religion, political or union affiliation etc.

Whether WorkChoices will mean changes for your broking business depends on a whole range of issues. If you have any concerns, or are not sure exactly where you stand, you should seek professional advice.