Vehicle Salespeople

Did you know?

There are a number of laws employers must consider throughout all stages of employing Vehicle Salespeople. It is important that businesses are aware of their obligations due to the potential fines they can face for breaching these laws and the risk of underpayment claims.

Criminal History

Firstly, it is important before you hire a salesperson that you conduct a criminal history check. Under section 13A of the Second-hand Vehicle Dealers Act 1995 (SA), a dealer must not employ someone as a salesperson if:

• they have been convicted of an indictable offence of dishonesty; or

• during the 10 years preceding their employment, they have been convicted of a summary offence of dishonesty; or

• they are suspended or disqualified from practising or carrying on an occupation, trade or business under a law of South Australia, the Commonwealth, or another State or Territory.

There is a maximum penalty of $100,000 for a breach of these laws. We recommend screening any new employees and implementing workplace policies that require employees to disclose if they become charged or convicted of any criminal offence.

Classification

Once you have hired a vehicle salesperson, you must ensure you are complying with the special provisions outlined under the Vehicle Repair, Services and Retail Award 2020. Firstly, your employee must be correctly classified. It is our interpretation that “persons employed principally to sell vehicles” includes anyone whose role is to assist in the vehicle sale process, including aftermarket sales and insurance and finance relating to the purchase of a new or second-hand vehicle.

Commission

Employers must make sure that vehicle salespeople are paid correctly. Commission is not a requirement but an option that businesses can offer to incentivise their employees. Therefore, you must ensure that your salespeople’s base retainer is high enough to cover their minimum entitlements. Full-time employees get penalty rates for working on days off, working on public holidays and working on Sundays. Full-time employees must get paid for a minimum of 38 hours, but the Award allows for an employee’s commission payments to offset hours worked in excess of 38 hours. This means that the commission an employee earns can be used to cover the extra hours they work beyond 38 hours in a week. The employer must review their wages every 3 months to ensure their commission payments are high enough to cover wages due from the extra hours worked.

If you want to offer your employees commission, the Award requires the commission structure agreement to be in writing and a copy given to the employee. The agreement cannot be changed except by mutual consent or a week’s notice from the employer. We recommend including a clause in your commission agreement to state that the business reserves the right to amend or terminate the policy with a week’s notice.

When a salesperson’s employment has ended, there are rules around the payment of their commission. In the event that their employment ends prior to the delivery of a vehicle for which they were entitled to commission, if the vehicle is delivered within 3 months of the termination, they will be paid two thirds of the commission they would have received. For vehicles already delivered, they must receive their commission payment within 14 days after the end of their employment. If multiple employees are involved in the sale or delivery of a vehicle, the commission due should be divided between them in a proportion they mutually agree to.

Please note that these laws are subject to change and this information should not be relied upon for legal advice. For assistance and the most updated information, please contact the MTA Workplace Relations Team on 8291 2000, or at wr@mtasant.com.au.