Adelaide business fined after salesman paid just $7000 for job advertised as $120,000 plus

An Adelaide real estate business has been fined $29,790 in the Federal Circuit Court after two of its sales employees were paid significantly less than the company’s job ads had suggested.

One salesman, who had an MBA in sales and marketing and 22-years’ experience in commercial sales, was paid less than $7000 for a job that was advertised with a potential salary of at least $120,000.

The employee responded to an ad for a salesperson placed by residential development company Longridge Group in 2011, which promised “an earning structure that doesn’t limit earnings – $120k++”.

But he quit after 10 months of signing up customers to Longridge building contracts, having earned just $6704 for signing up four customers. He should have been paid $20,013. 

A second employee, who had qualifications in real estate and a certificate in building and construction, also took a job with the company after it was advertised as having a salary of $70,000 plus.

He told the court he understood he would be able to earn between $70,000 and $80,000 a year from selling Longridge homes, but quit after six months, having not sold any homes and not being paid anything at all. He should have been paid minimum wages and entitlements totalling $11,647.

The Fair Work Ombudsman launched legal action against Longridge after the employees complained to the watchdog.

Longridge later admitted it had inadvertently breached workplace laws by paying the two employees on a commission-only basis. It subsequently back-paid the workers in full.

Judge Stewart Brown said the employees provided valuable services to Longridge for which they were not remunerated.

“They manned (Longridge’s) display villages, they fielded inquiries from the general public, they acted as the public face of Longridge,” Judge Brown said.

“The gentlemen in question worked for periods of months, rather than weeks or days, before they each threw in the towel (with Longridge) and sought alternative employment.”

Employment lawyer and M+K Lawyers partner Andrew Douglas told SmartCompany despite the misleading ads, this was a simple case in which the employer failed to pay the minimum entitlements to workers.

Douglas says even commission-based jobs attract minimum award entitlements, including annual leave.

“It is very common in number sale-based jobs to offer commission only employment,” says Douglas.

“But there are minimum entitlement that exist under the award, so employers should be aware of awards before offering people employment.”

SmartCompany contacted Longridge but the company declined to comment.