The Conversations That Can Cost You: Managing People in Your Agency Without Creating Legal Risk
The Fair Work claim you never see coming almost never starts with a sacking. It starts months earlier, in an ordinary conversation nobody thought twice about. A performance chat that came out wrong. A flexibility request knocked back in a text. A bonus that quietly changed.
By the time anyone is talking about termination, the evidence has usually already been created.
We ran an in house session for agency leaders on exactly this, and the same pattern came up in every example: good operators, no bad intent, and a claim that traced back to something small. Employment sits alongside every other part of real estate agency law, and it is usually the part an agency leaves until last. Here is what we covered, in the order it usually bites.
Three Beliefs That Quietly Create Risk
Most of the exposure we see does not come from anyone behaving badly. It comes from three beliefs that feel true and are not.
"If I keep it verbal, there is no risk."The thinking is that nothing in writing means nothing to come back on you. The opposite is true. A conversation with no notes does not protect you, it exposes you. If a dispute lands months later, your employee will have their version and you will have your memory. Good documentation is not about building a case against your people. It is about protecting what matters when someone else's memory gets creative.
"Employment law only matters when I sack someone." Most principals think the risk sits at the exit. It sits at the start: the offhand comment in a one on one, the flexibility request handled badly, the incentive that changed without a conversation.
"It is my business, so I can change pay and conditions when I need to." It is your business. But once something has become a term of employment, whether written down or simply the way it has always been done, you generally cannot change it on your own. Commissions, bonuses and hours can all become contractual. There is a right way to make changes, and it is very doable once you know the steps.
The Everyday Conversation Is Where It Starts
The golden rule is short: facts, behaviour and impact. Not personality, not assumptions, not how you feel about the person.
So instead of "you have got a bad attitude," it is "on these three occasions this happened, and here is the impact it had." Specific, factual, calm.
You can absolutely address performance. Set clear expectations, say the standard is not being met, say what needs to change. Managing performance is your job, and doing it well is not a legal risk. Doing it vaguely and emotionally is.
Steer well clear of anything personal: someone's age, health, young kids, possible pregnancy, cultural background. Even as a throwaway line. Those comments turn a performance issue into a discrimination claim. Avoid threats and ultimatums too, and be careful with "let us keep this off the record," because there is no such thing.
Here is the one that catches people. What you do not say matters as well. If you only ever raise issues verbally and never write anything down, then six months later when you finally act, there is no record the problem ever existed. That looks like it came out of nowhere, and it is a hard position to defend.
Picture a top performer whose office behaviour had become a real problem, snapping at admin staff, dismissive in meetings. The manager raised it a few times, always verbally, always a bit vague, usually when he was frustrated. It came to a head, the agent was performance managed out, and a claim followed. The agency had no notes and no record of the earlier chats, but it did have one email calling the agent "probably just burnt out and needs to toughen up." That line, meant kindly, became the centrepiece. Same facts, specific written notes and neutral language, and it is a very different story.
The Right to Disconnect, in Plain English
Employees have the right to refuse to monitor, read or respond to work contact outside their working hours, unless that refusal is unreasonable. The contact can come from you or from a third party such as a client. It applies to all employers, and to small business employers, those with fewer than 15 staff, since 26 August 2025.
It is not a ban on contacting your team after hours. You can still send the message. What has changed is that your team member generally has the right not to respond until they are back at work, and you cannot punish them for that. Whether a refusal is reasonable depends on things like whether they are paid for that availability, their seniority and responsibility, why you are contacting them, and how much notice you gave.
The part specific to our industry. The Real Estate Industry Award has dealt with the on call question for a long time. Under the stand-by and call-out provisions at clause 19.3, if you genuinely need a property manager on stand-by or on call outside ordinary hours, you and that employee have to agree in writing on how they are compensated for it. That compensation can be folded into a salary sitting above the award minimum, as long as it is clearly identified in the agreement. And here is the sting in the tail: if there is no written agreement, that stand-by or call-out time can count towards their ordinary hours of work. Doing nothing is not the safe option.
That is the missing piece for a lot of agencies. If genuine after hours availability is part of a property manager's role, do not expect it for free and hope nobody minds. Build it into the role, agree it in writing, and pay for it. A reasonable expectation of availability then becomes far easier to defend, because the right to disconnect looks squarely at whether the person is compensated for being available.
Beyond that, the everyday risk is cultural: the office where people feel they must reply at 9pm or be seen as uncommitted. The bigger risk is treating someone differently, cooler, fewer opportunities, a worse review, because they did not jump.
Consider an office where everyone stayed responsive in the team chat until late, especially on weekends. One property manager muted notifications after 6pm to protect family time. Her manager began leaving her off weekend messages and, at review time, noted she "was not a team player." Because the only thing that had changed was that she exercised her right to disconnect, the agency was in a difficult spot. The fix was never banning contact. It was resetting the expectation, and never linking after-hours responsiveness to how someone is treated.
Flexible Work: You Can Say No, If You Do It Properly
Good agencies trip up here, not because they say no, but because of how they say no. Certain employees have a right to request a flexible arrangement: changed hours, part time, or working from home. That includes parents or carers of school age or younger children, carers more broadly, people with disability, employees 55 and over, those who are pregnant, and people affected by family and domestic violence, generally after 12 months with you. The request goes in writing.
Here is what you must do, and the process matters as much as the answer.
Respond in writing within 21 days.
Before you can refuse, actually discuss it with them and genuinely try to reach agreement on something that could work.
Only refuse on reasonable business grounds: real cost, capacity, practicality, or a genuine hit to efficiency or customer service.
If you refuse, explain the specific grounds, how they apply to this request, and what alternatives you offered.
What is not a reasonable ground?"I prefer everyone in the office." A general preference will not cut it, and neither will a vague "it does not suit operations." And there are teeth in this now: if you get the process wrong, the Fair Work Commission can step in and deal with the dispute, including arbitrating it.
The failure mode is almost always speed. A property manager asks to work from home two days a week. The principal replies by text the same day: "Sorry, we need everyone in the office, it is our culture." No meeting, no alternatives, no written reasons. The outcome may well have been defensible. The process was not.
Parental Leave and the Return to Work
These conversations are easy to get wrong with the best intentions. Eligible employees can take up to 12 months of unpaid parental leave, plus a right to request a further 12 months, which you can only refuse on reasonable business grounds after discussing it. When they return, they are entitled to the position they held before they left. If that role genuinely no longer exists, they are entitled to an available position nearest in status and pay that they are suited to.
Agencies get into trouble two ways. Restructuring someone's role while they are away, so they quietly come back to something lesser. And assumptions in the return conversation, like "she will not want the big listings now." Even kind assumptions can become discrimination. Let people tell you what they want.
Keep them reasonably in the loop about significant changes while they are on leave, and have a genuine, open return to work conversation. If they ask for flexibility on return, that is the flexible work process above. A long absence at the top of an agency raises a separate planning question worth sitting with too, which is what happens if your licensee in charge is suddenly unable to manage your agency.
Bonuses, Commissions and Incentive Schemes
This is the one that quietly creates the most disputes about money. An incentive can become a contractual entitlement, not just because it sits in the employment contract, but because of the way it has consistently been paid and understood. Years of paying a certain commission split on a certain basis can harden that practice into a term, with no signed document anywhere.
Once it is a term, you generally cannot change it alone. Cut a split, move a threshold or restructure a scheme unilaterally and you may be in breach of contract, facing a claim for the difference that can reach back a fair way.
So how do you change a scheme safely? Consult. Explain the change and why. Give clear notice. Get agreement, documented, before it takes effect. And going forward, two habits protect you: put every incentive scheme in writing, and build in an express right to review or amend it, with notice. That single clause is the difference between adjusting a scheme properly and being stuck with it. One caveat: if you have award covered employees, schemes have to sit on top of award minimums, not instead of them. And if some of your salespeople are engaged as contractors rather than employees, settle that question before you redesign anything, because the test for whether someone is an employee or a contractor drives everything else, and the legal traps in contractor agreements are worth knowing first.
The Documentation That Actually Protects You
The thread running through all of this is documentation, and it is lighter than people fear.
After any conversation that matters, a performance chat, a flexibility request, a change to pay, write a short file note the same day while it is fresh. Facts and what was agreed. Emotion and opinion left out. Date it.
For the important things, follow up with a short, friendly email confirming what you discussed and agreed. That creates a shared record without anyone feeling ambushed.
Write your policies down: expectations around after hours contact, your flexible work process, and your incentive schemes.
A three line note beats a perfect memory every time. You do not need lawyers in the room for everyday management, just short factual notes and a few clear written policies. It is the same discipline that keeps a trust account clean, and we have set out what that looks like in a real estate agency's trust account obligations.
None of this is about walking on eggshells. The agencies that get this right run calmer and lead with more confidence, because they know what they can say, how to say it, and how to keep a simple record. That is a much better place to manage from. If your employment and contractor arrangements have not been looked at since the day you wrote them, that is the place to start.
Key Takeaways
Employment risk in an agency is created early, in everyday conversations, not at the termination. Get those right and most claims never start.
In any hard conversation, stick to facts, behaviour and impact, then write a short file note the same day.
Never comment on someone's age, health, family situation, pregnancy or cultural background, even as a joke. That is what turns a performance issue into a discrimination claim.
The right to disconnect is not a ban on contacting your team. It means employees can generally choose not to respond outside working hours, and you cannot treat them worse for it. It has applied to small business employers, those with fewer than 15 staff, since 26 August 2025.
If a property manager is genuinely needed on stand by or on call, the Real Estate Industry Award requires a written agreement on compensation. Without one, that time can count towards ordinary hours.
You can refuse a flexible work request, but only after genuinely discussing it, on real business grounds, in writing, within 21 days. "I prefer everyone in the office" is not a reasonable ground, and the Fair Work Commission can now arbitrate the dispute.
After parental leave it is the same position back, or the nearest available equivalent in status and pay. Do not assume what a returning parent wants, ask them.
Commissions and bonuses can become contractual by long standing practice alone. Put every scheme in writing with an express right to review, and never change one unilaterally.
Short factual file notes, confirming emails and written policies are the protection. Not bureaucracy, just habits.
Next Steps
Pick the conversation you have been putting off, and plan it around facts, behaviour and impact rather than personality.
Start the file note habit this week. Same day, three lines, dated, no emotion.
Write down your after-hours expectation, and check whether anyone in your team is genuinely on stand-by without a written compensation agreement.
Build a simple flexible work process: meet, discuss, consider alternatives, respond in writing within 21 days with specific grounds.
Pull out every commission, bonus and incentive arrangement in your agency and ask two questions: is it in writing, and does it include a right to review.
Do those five and most of the risk in this article disappears before it ever becomes a problem.
Got a conversation you are dreading, an on call arrangement you have never put in writing, or a bonus you have been meaning to change?
Frequently Asked Questions (FAQ)
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You can address performance directly. Talk about facts, behaviour and impact: what happened, on what dates, and the effect it had. Set clear expectations and say what needs to change. Avoid anything personal, including comments about age, health, family, pregnancy or cultural background, and avoid threats or off the record deals.
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No. You can still contact your team. The right to disconnect means an employee can generally choose not to monitor or respond to that contact outside their working hours, unless the refusal is unreasonable, and you cannot treat them worse for it. It has applied to small business employers, those with fewer than 15 staff, since 26 August 2025.
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If you genuinely need someone on stand-by or on call outside ordinary hours, the Real Estate Industry Award requires you and the employee to agree in writing on how they are compensated. That can be folded into a salary above the award minimum if it is clearly identified. Without a written agreement, stand-by or call-out time can count towards ordinary hours.
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Yes, but only after you have genuinely discussed it and tried to reach agreement, and only on reasonable business grounds such as cost, capacity, practicality or a real hit to efficiency or customer service. You must respond in writing within 21 days and explain the specific grounds and the alternatives you offered. A general preference for everyone in the office is not enough.
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They are entitled to return to the position they held before the leave. If that role genuinely no longer exists, they are entitled to an available position nearest in status and pay that they are suited to. Do not restructure them out while they are away, and do not assume what they want on return.
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Not unilaterally, if the structure has become a term of employment, and it can become one through consistent practice even without a signed document. Change it by consulting, explaining the reasons, giving clear notice and getting documented agreement. Going forward, put every scheme in writing with an express right to review or amend it.
Kristen Porter – Principal, Realgate Legal
Kristen Porter is one of the Principals at Realgate Legal. With over 20 years of legal experience and dual degrees in Law and Commerce, Kristen brings a rare blend of legal expertise and commercial insight to every matter. She is a trusted advisor to business owners and agency leaders across Australia, helping them build profitable, legally sound businesses.
Known for her practical, no fluff advice, Kristen focuses on real estate agency law, corporate, and privacy law and regularly presents at industry events. At Realgate Legal, Kristen leads a team committed to making the law clear, actionable, and always aligned with your business goals.
Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.