Commercial Sales Award 2020 - A Simple Guide for Your Business

Apr 13

Who is Covered? (Common Roles in Simple Terms)

Identifying exactly where your employees fit is essential for compliance. Here is a breakdown of the three key roles:

Commercial Travellers: These employees are "on the road" to secure orders for goods that will be resold or used by a customer to produce other products.
Advertising Sales Representatives: Their primary focus is finding sales leads, booking appointments, or selling advertising space across any medium while working away from the office.
Merchandisers: These employees handle the "hands-on" retail presence. They set up displays, manage stock levels, and promote products. While they might occasionally take an order, this is only a minor part of their job.

Note: Probationary Traveller : When you hire a new Advertising Sales Representative or Commercial Traveller, they are classified as a "Probationary Traveller" for their first three months of service. This role has its own specific minimum pay rate.

Why Correct Classification Matters

Choosing the right category for your employee is your first line of defense against back pay claims. A common compliance trap is misclassifying a "Commercial Traveller" as a "Merchandiser." Because Merchandisers generally have a lower base rate of pay, misclassifying a staff member who is actually focused on wholesale sales can lead to significant issues with Fair Work.

Additionally, if you use a commission-based pay structure, remember that commissions cannot be used to drop an employee's take-home pay below the award minimum. The safety net rate must always be met.

Employment Types and Hours of Work

The award provides three ways to engage your employees:

1. Full-time: These employees work an average of 38 hours per week.

2. Part-time: These employees work fewer than 38 hours per week. You must have a written agreement regarding their set hours, days of work, and start/finish times before they begin.

3. Casual: These employees are hired as needed. They receive a 25% "loading" on top of the minimum hourly rate to compensate for not receiving paid leave entitlements.

Hours of Work The standard work week is an average of 38 hours, with a maximum limit of 10 ordinary hours per day.

Part-time employees must be rostered for at least 3 consecutive hours per shift.
Casual employees must be paid for at least 2 consecutive hours every time they attend work.

The Right to Disconnect

New rules protect an employee’s right to refuse to monitor or respond to contact from their employer or clients outside of working hours, unless that refusal is unreasonable.

Taking Breaks

To keep your team productive and healthy, the rules are simple: you must allow employees reasonable time for regular and normal meals every day.

Meal Expenses during Travel: If an employee is required to be away from their usual residence overnight for work, the employer must reimburse expenses for meals and morning or afternoon tea taken at the usual time for such meals

Understanding Pay, Penalties, and Allowances

Minimum Pay and Annual Leave Loading

The award sets specific minimum rates for each classification. If you employ juniors (under 21), their pay is a percentage of the adult rate.

A unique feature of this award relates to Annual Leave Loading. When an employee takes annual leave, you must pay them their base rate plus a 17.5% loading OR their average commission over the last 12 months (whichever of the two is higher). This ensures sales staff aren't financially penalised for taking a well earned break.

Penalty Rates

When work is performed outside of standard hours, higher rates apply:

Weekdays after 6:00 pm: 150% of the minimum hourly rate.
Saturdays: 150% (with a 2 hour minimum payment).
Sundays: 200% (with a 3 hour minimum payment).
Public Holidays: Work performed on a public holiday is paid at 250%.

Pro-Tip for Cash Flow: Instead of the 250% payout for public holiday work, you and your employee can agree in writing to grant 2.5 days of paid leave instead.

Common Allowances

Because these roles involve significant travel, you are required to reimburse or cover specific costs:

Vehicle Allowance: If an employee uses their own vehicle for work, you must pay $0.98 per kilometre for cars, or 0.33 per kilometre for motorcycles.
Weekend Allowance: If you require an employee to be away from home for a weekend, you must pay an allowance of $64.80 per weekend.
Living Away From Home: If an employee must stay away from home for two or more consecutive nights in a week, you must pay an additional $81.59 per week.
General Expenses: You must reimburse "reasonable expenses," including 3 star accommodation, meals when away overnight, and approved parking.

Common Compliance Pitfalls for Employers

The 14-Day Statement: Within 14 days of a new hire starting, you must provide a written statement detailing their pay, commission structure, and vehicle arrangements. Crucially, if they have a "patch," you must define the territory boundaries. If you change their territory later, you must update this statement.
Public Holiday Travel: While work on a public holiday is 250%, required travel time on a public holiday is paid at 150% (with a 3-hour minimum).
Vehicle Modifications: If you require an employee to modify their personal car for work (e.g., installing a rack or branding), you must reimburse the full cost.
Commission-Only Pay: You cannot pay commission-only if the final amount ends up being lower than the award’s minimum weekly or hourly rate.

Practical Tips for Staying Compliant

Keep it Accessible: Ensure a copy of the Award and the NES is available to all employees, either on a notice board or via your company's digital drive.
Written Agreements First: Never start a part-time employee without a signed agreement regarding their specific hours and days.
Use Flexibility Agreements: If you need to vary terms like overtime or allowances to suit your specific business needs, use an Individual Flexibility Agreement (IFA). Just ensure the employee is "better off overall" than they would be under the standard award.
The July 1st Cycle: Minimum pay rates usually update on July 1st each year. Set a calendar reminder to check the latest figures to avoid accidental underpayment.

While the Commercial Sales Award 2020 has several moving parts, particularly regarding travel and reimbursements, it boils down to clear communication and fair compensation for the costs of being "on the road." By providing written statements, maintaining correct classifications, and ensuring your reimbursement rates are up to date, you can manage your team with confidence and focus on growing your business.

If you ever feel uncertain, getting a quick professional review of your employment contracts can save you a world of stress down the line. FiveSeven can help you get on the right track.

The information above forms part of our Understanding Your Award series and provides a high-level overview only. Further obligations may apply depending on your business and workforce. This Information is current at the time of publication Jan 2026. Workplace laws and awards may change.