The Fair Work Commission (FWC) has clarified the way in which employees are to be paid for the excess time they spend travelling under the Real Estate Award.
The variation only seeks to clarify obligations that already existed under the Award, but were deemed necessary after an application was lodged with the FWC requesting it amend certain clauses in the Award to provide more clarity around an employee’s minimum pay and car allowance entitlements.
This relates to circumstances where the employee is specifically required by their employer to either start or finish work at a location other than the employer’s business premises.
If an employer requires an employee to start or finish work at a location other than the employer’s business or office, the employee must be paid for the time they spend travelling to or from the new location, which is in excess of the time they would normally spend travelling from home to the office.
That excess travel time is to be treated as either ordinary working time or as overtime for casual employees, and paid at either ordinary or overtime rates, as appropriate.
If the employer also requires the employee to use their own vehicle in the course of their employment, the employee will be paid the applicable motor vehicle allowance.
The changes are in effect now.
According to an example on the Real Estate Employers Federation (REEF) website:
Alice is a real estate salesperson with REEF Real Estate. Alice lives 10km from the office of REEF Real Estate.
In morning and afternoon traffic, it would normally take Alice around 20 minutes to undertake her journey to and from work to home.
Alice is specially directed by her employer to conduct a 7.30am listing presentation at a location which is 25 kilometres from Alice’s home.
Alice goes straight from home to conduct the listing presentation. It takes her 45 minutes to undertake this journey.
Accordingly, Alice will travel 15 kilometres more than normal to get to the location of the listing presentation and spend 25 minutes extra to get there.
The 25 minutes extra travel time that it takes Alice to get to the listing presentation (compared to the time usually required to travel to the office) is considered “excess travelling” time.
These 25 minutes must be treated as part of her 38-hour working week and paid as such by Alice’s employer.
If Alice is paid a motor vehicle allowance calculated on a per kilometre basis, she will also be entitled to receive a motor vehicle allowance calculated on the excess travel distance of 15 kilometres.
However, if Alice receives a motor vehicle allowance calculated as a “lump sum” prescribed by the Award (as is most common in the real estate industry), there will be no extra reimbursement for travel costs.
REEF Chief Executive Officer Bryan Wilcox said the variations clarified provisions that employers should already be applying.
“The new Award provisions highlight the need for employers to understand and recognise that where their employees (who are covered by the Award) commence or finish work other than at the employer’s office and this is done with the knowledge, direction or consent of the employer (however this may be given), the work performed at the location, and/or excess travel time spent getting to the location, should be considered part of the employee’s ordinary hours of work,” he said.
“Ultimately, the employer has the right to decide where employees start and finish work.
“If employees start and finish work from the office, there is no excess travel.”
Key features from this Award variation are:
- The change to the Award outlined above became operative from 1 March 2024.
- To avoid any doubt, it should be observed that only employees covered by the Real Estate Industry Award 2020 are affected by the decision. With the exception of commission-only salespeople who are not affected in any way by this decision.
- Employees who are engaged under the Clerks – Private Sector Award 2020 are not affected by this decision.
- Excess travel time is counted as working time and must either be treated as ordinary hours of work or as overtime where the excess travel time was at the specific direction of the employer.
The practical impact of these Award changes for business owners:
As the Award variation only seeks to clarify obligations that already existed, for most real estate employers there will be no practical impact from this decision. This is because:
- under Clause 19 of the Award, an employee is not entitled to be compensated for work conducted outside their ordinary hours of work unless the employer has specifically directed them to do so; and
- most employers are paying the motor vehicle allowance by way of lump sum and the lump sum is reimbursement for all travel undertaken by the employee.
