The Fair Work Commission has implemented changes to provide clarity regarding the compensation of employees for excess travel time under the Real Estate Award. Excess travel time refers to the additional time spent travelling from an employee’s home to a location other than their employer’s business premises.

The key provisions include:

    • If an employer mandates that an employee starts or finishes work at a location away from the business or office premises, the employees are entitled to payment for the time spent travelling that exceeds their normal commute to the employer’s usual place of business.
    • This extra time is considered as time worked, and employees receive compensation at either ordinary rates or applicable overtime rates.
    • Employees who are required to utilize their personal vehicles for work are also entitled to receive the relevant motor vehicle allowance.

What is meant by the term “excess travelling”?

The term “excess travelling” encompasses the time and expenses incurred by an employee when obliged by the employer to commence or conclude work at a location other than the employer’s business premises.

This is best explained through the Fair Work scenario:

Alex is a real estate agent who holds home inspections every Saturday. They have an inspection on the other side of town and the employer requires Alex to travel to the client’s home which is 40 minutes away.

Alex’s commute to the real estate agency’s office typically takes 15 minutes. Alex is entitled to be paid for the excess travel time to the client’s house. This is paid for any travel time that’s in addition to the time it would usually take them to commute to the office.

The trip to the client’s home takes 40 minutes and Alex’s usual trip to the office takes 15 minutes, so Alex is entitled to be paid for the additional 25 minutes of travel time.

If Alex is required to use their own vehicle, they also receive the applicable motor vehicle allowance.

Summary of Key Changes

    • The amendments to the Award mentioned earlier took effect on March 1, 2024.
    • It is important to note that only employees covered by the Real Estate Industry Award 2020 are impacted by this decision, with commission-only salespeople remaining unaffected.
    • Excess travel time is now considered part of working hours and must be treated as either ordinary hours or overtime if the excess travel was specifically directed by the employer.

Practical Implications for Your Agency

Given that the Award changes primarily aim to clarify existing obligations, most employers will likely experience minimal practical impact. This is due to the following reasons:

    • According to Clause 19 of the Award, employees are not entitled to compensation for work conducted outside their regular working hours unless explicitly directed by the employer.
    • The majority of employers already provide a lump sum as a motor vehicle allowance, covering all employee travel expenses.

Employers must recognise their authority in determining where employees start and finish work. If employees operate from the office, there is typically no excess travel involved. However, the new provisions emphasise that employers should understand where their employees commence or conclude work outside the employer’s office with the employer’s knowledge, direction, or consent, the work and excess travel time should be considered part of the employee’s ordinary working hours.

For employers directing employees to undertake excess travel time or additional hours beyond their regular work hours, overtime provisions will continue to apply. Employers utilising per-kilometre or standing charge plus kilometre allowances should ensure reimbursement aligns with the recent change, covering any excess travel.

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