Workplace inflexibility preventing job creation in the Australian hotel sector

March 21, 2014

Tourism Accommodation Australia will be leading the push to have restrictive work practice provisions amended to allow the hotel and tourism sectors to increase work flexibility and encourage greater employment across the country.

TAA has welcomed the Federal Government’s decision to ask the Productivity Commission to review the Fair Work Act, and we will be making a submission to the Productivity Commission on behalf of members that will demonstrate that greater flexibility of labour conditions would benefit both businesses and workers. We also believe the Commission should review the punitive Penalty Rates situation which is one of the leading disincentives for the industry to employ more staff.

As we lead up to the Easter break, we are already hearing of members who are saying that the prospect of paying 275% penalty rates on the public holidays will make it uneconomical for them to open their doors. So on days when there might be reasonable numbers wanting to enjoy a meal or drink, potential patrons will be deprived of that opportunity, as will workers who want to work on these days because it suits their own lifestyle requirements.

Opponents of the need for greater flexibility immediately say that it is “all about reducing pay rates”, but it’s not. We do not want to reduce our employees earnings but we do want to create more jobs for more people at reasonable rates of pay especially reliable part time and casual jobs.

It’s all about matching the needs of business with the needs of employees. When you have a situation that employees want to work, customers want to buy, but businesses decide they would actually lose money by opening, then clearly the system needs reviewing.

The issue goes even deeper than that. If we are to provide service levels that match our Asian counterparts – and Australian hotels and resorts compete directly with their Asia Pacific counterparts – then we need to operate our hotels with greater flexibility.

This current inflexibility is particularly affecting regional and resort areas where tourism is so crucial for job creation and the vitality of the local economy, but operating costs are a fundamental problem for many operators. These areas are usually very seasonable operations characterised by short periods of peak business and longer periods of fairly slow business, so employment and work conditions need to better reflect the trading cycle of these businesses and their customers, otherwise we will see more and more businesses close during low seasons, which will severely disrupt the lives of employees and their communities.

What is important is that members across the country make it clear to their politicians and industry bodies that inflexible working conditions are damaging the interests of both employers and employees. Our businesses could employ many more people, particularly casual and part-time, if regulations didn’t make it such a disincentive to employ staff.

The key is to match employee and employer needs. Currently, there are major restrictions about minimum hours and mixing roles within a hotel, but that doesn’t reflect how the business operates and the needs of employees and customers. For example, a hotel might need a staff member for the breakfast restaurant shift, but if the restaurant is then closed till dinner, the worker may only get a four hour shift, which doesn’t suit either employee or hotel management. Equally, a hotel may need someone for two hours and an employee may only have two hours available to work.

The media tend to concentrate on the penalty rate issue because it looks like a simple move by employers to reduce wages, but what it doesn’t take into account is that these days working on weekends or public holidays is “normal” for such a large number of people. Because of their family situation or because of studying this is often the only time they can work.

The days when Monday to Friday/9 to 5 conditions were the norm ended in the last millennium, today we are a 24 hour/365 days a year economy and yet working conditions have barely changed to reflect this.

It simply is not satisfactory, and Australia’s competitiveness and professionalism in the eyes of the international tourism industry are suffering as a result.