Melbourne estate agent wins $10,300 backpay after unlawful employment arrangement

The Fair Work Ombudsman has secured $10,300 backpay for a Melbourne real estate salesman who was underpaid as part of an unlawful employment arrangement.

The salesman, a recent Sri Lankan immigrant in his 50s, was underpaid between October, 2010 and February, 2011 when employed at McDonald Real Estate Dandenong.

McDonald Real Estate directors John and Le Hoa Wysham of Aspendale also operate other real estate agencies in Melbourne.

After the salesman lodged a complaint, the Fair Work Ombudsman found that the salesman was initially unlawfully required to perform four weeks of unpaid work under a purported ‘training program’.

Over the next three months, he was paid $551 a week as an ‘advance against future commissions’, plus a car allowance of $115 a week.

However, the retainer was cancelled after about three months and the employee was paid only the $115 weekly car allowance for a month before his employment was then terminated.

Under the Real Estate Industry Award 2010, commission-only arrangements are applicable only when if it can be demonstrated that an employee has earned more than the minimum wage payable under the award selling real estate in any 12-month period over the preceding five years.

As the employee did not fit into this category, the employer should have paid wages of at least $557 a week throughout his employment.

Given the Wyshams admitted being involved in the underpayment, as an alternative to litigation they entered into an enforceable undertaking and agreed to:

• Donate $1,000 to the Peninsula Community Legal Centre;
• Make a formal written apology to the underpaid employee;
• Develop processes for ensuring future compliance with workplace laws for all real estate agencies they are involved in - and provide evidence of the measures to the Fair Work Ombudsman;
• Undertake a professional audit of all real estate agencies they are involved in and rectify any underpayments identified;
• Conduct further compliance audits for the next three years;
• Provide professional workplace relations training for all managerial, human resources, recruitment and payroll staff at real estate agencies they are involved in for the next three years;
• Publish a public notice detailing the contraventions of workplace laws on the McDonald Real Estate website and in The Dandenong Leader and Melbourne Weekly newspapers; and
• Display the notice at the premises of all real estate agencies they are involved in.

Fair Work Ombudsman Nicholas Wilson says that in cases of significant non-compliance, enforceable undertakings are being used as an effective alternative to litigation.

The Ombudsman has entered into more than 30 enforceable undertakings since July, 2009, while recovering $5.4 million for more than 6900 employees.