Some Ontario Realtors are fighting discount competitors, higher operating costs, and poor benefits by joining a newly chartered real estate union, Local 2001 of the Brewery, General & Professional Workers' Union.

UnionREP, the Union of Real Estate Professionals, is being led by former RE/MAX real estate broker Frank Gerace, with the goal of setting up 4,000 offices across the Canadian province, and attracting 5,000 members. The purpose of the union is to protect agents' base rates, says the new president. "We need to establish what salespeople are getting paid," Gerace told Agent News. "When an office joins our union, the broker will commit to paying commissions of five per cent on exclusive listings and six percent on MLS listings."

Is this price fixing? Not in the least, says Gerace. "We are agreeing on remuneration for the salesperson. Collective agreement imposes no restriction as to the fee the broker charges the consumer, but the salesperson is paid based on 6 percent of the home," he says. "Different salespeople within an office can be paid different splits such as 80/20 or 60/20. The question is they are paid 80 percent of what? Brokers are able to charge consumers different commissions and they can't legally fix commission prices between each other. But salespeople have the right as employees under the Labor Relations Act to have representatives negotiate through collective bargaining what their base pay will be, and in this case, the base pay is based on a six percent commission."

"Salespeople are employees of the broker," explains Gerace. "If you don't believe me, take your license out of your wallet and look at it. It says employee. (Canada) Where people get confused is that there is a difference in the way you work and the way you may report your taxes. You may be an independent contractor when you are paying your taxes, but you can only work for one broker. That makes you a dependent contractor - an employee."

How are brokers going to take a salespersons' union? Gerace is careful to point out that this union doesn't operate like most unions do, it is not designed to impact the broker. "The general perception is that with a union the employee starts a tug of war with the employer," says Gerace. "I've been a salesperson and a broker so I saw both sides. We decided that the way to make this work is not to pass on more expenses to the broker. In fact we are making our benefits packages available to brokers and their management staff."

Gerace negotiated with the parent union, Brewery, General & Professional Workers' Union, to make special concessions for this particular group of professionals. "Real estate professionals work differently from factory workers or nurses," says Gerace. "But if I quit tomorrow, I've got nothing after 17 years in the business. We need benefits like everyone else." The union, Gerace, explains, will enable salespeople to get affordable benefits such as health and dental plans, drug plans, pension plans, financial programs, legal help they don't get now.

"They want someone to listen to them, and the boards and the ministries just haven't come through,"says Gerace. "The associations can't represent anyone, and the salespeople want representation."

According to the first broker to reach a collective agreement with the union, Doug Humphrey, broker/owner of RE/MAX Cornerstone Realty Ltd., the union is a positive step. "Ultimately, this will make us more money as brokers, and make our agents more money and make them happier," Humphrey said. "They are going to be able to put more into their service, advertise better, and everything will be better because they will have more money to work with."

Funded by the parent union, UnionREP has to get between 5,000 and 10,000 members to start benefit packages. While he would like to be on target to get 5,000 by September, the number isn't realistic. "I could visit an office every day and still only see 300 a year," he says. "But I'm encouraged because everyone we have talked to, not one has turned us down yet."

"This is Canadian history being made up here," says Gerace. "It's been coming for a long time, and I can see it go across the country. I could see that happening easily."

Published: July 3, 2001

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