Australian Tourism and Hospitality Industry Employers: Fast Facts
Tourism is a key economic driver generating more than 94,000 jobs and contributing $9 billion to the Western Australian economy. As an industry, hospitality is the seventh largest employer in Australia, with approximately 796,500 workers and growing. As these sectors continue to grow, it is important for employers in the industry to be reminded of the laws that they must comply with – in particular what rights their employees have.
The Fair Work Act 2009 (Cth) (FW Act) provides the foundation of most employer liabilities and obligations, some of which you may be unaware. While they are sometimes minor matters, knowing about these obligations could save you time and money in the future, as well as minimise the risk of litigation. This article gives a brief overview of the most common issues that affect hospitality and tourism employers in the federal industrial relations system.
National Employment Standards
Minimum terms and conditions of employment are contained in the FW Act and are called the National Employment Standards (NES). The NES are ten core conditions of employment which cannot be contracted out of and include such things as leave (annual, personal, community, carers, parental etc.), redundancy pay, notice payments and public holiday requirements.
In addition to the NES, modern awards and enterprise agreements may also impart further and more occupation-specific obligations.
Obligations under modern awards and enterprise agreements
In the federal IR system, modern awards and enterprise agreements cover much of the workforce and set out other minimum obligations not found in the NES. An employer cannot choose whether a modern award applies to it and its employee(s); if the modern award states that it covers the employer and employee, then it will do so.
However it is possible for employers to enter into an enterprise agreement with employees which lawfully allows the relevant modern awards to be bypassed to a certain extent. For an enterprise agreement to be valid, the agreement must pass the “better off overall test” before the Fair Work Commission. This requires the employer to show that the employees are better off overall under the enterprise agreement in comparison to the applicable modern award.
An employer can determine what modern award covers them and their employee(s) by considering the ‘Coverage’ clause of an Award and seeing if the type of work performed by the employee(s) falls wholly or substantially within its coverage.
Some modern awards that may be applicable to the tourism and hospitality industry include, but are not limited to the:
- Amusement, Events and Recreation Award 2010
- Hospitality Industry (General) Award 2010
- Marine Tourism and Charter Vessels Award 2010
- Racing Clubs Events Award 2010
- Registered and Licensed Clubs Award 2010
- Restaurant Industry Award 2010
Determining the applicable modern award is important to ascertain the additional minimum legal obligations that an employer is required to comply with and usually includes things like allowances, hours of work, rostering and penalty rates.
A business may have more than one modern award apply to it and its employees, and close scrutiny of its enterprise will be needed to determine what modern award applies for each employee. For example, a marine park that has boats, restaurants and amusement rides may potentially fall under the Marine Tourism and Charter Vessels Award 2010, the Restaurant Industry Award 2010 and the Amusement, Events and Recreation Award 2010.
In the event multiple modern awards apply, an employer can avoid the administrative burden of keeping track and paying according to the various modern awards by entering into a single enterprise agreement which can cover the entire workforce. Jackson McDonald can assist a business in determining which modern awards cover its enterprise and the procedural requirements for making an enterprise agreement.
Finally, all modern awards and enterprise agreements place an obligation on employers to consult with employees on major change in the workplace, including changes to the organisation’s production, program, organisation, structure or technology that are likely to have significant effects on employees. 'Significant effects' includes termination of employment, loss of job opportunities and the transfer and restructuring of jobs. This is an obligation that many employers are unaware of and can have potential ramifications in regard to unfair dismissal, redundancy and breach of award/enterprise agreement claims.
Individual flexibility agreements
It is possible to alter certain minimum terms and conditions of a modern award or enterprise agreement is through an individual flexibility agreement (IFA). An IFA allows an employer and employee to agree in writing to alternate terms and conditions but only for certain obligations.
Each modern award specifies which award obligations may be varied and usually include the ability to vary matters such as penalty rates, hours of work, leave loading and overtime. The terms of an enterprise agreement that may be varied are only those terms of the enterprise agreement that are specifically mentioned in the flexibility term of the enterprise agreement as being alterable.
Importantly, an IFA must be genuinely agreed to by both parties, must still place the employee in a better off overall position in comparison to the award/enterprise agreement (however this is not limited to simply a financial benefit) and can be terminated by an employee. While an IFA does come with these requirements, they may still be useful tool for those in the hospitality and tourism industry as it allows the variation of such things as ordinary hours of work and penalty rates.
457 Visa holders and overseas workers
Those in the tourism and hospitality industry may be tempted to engage seasonal or overseas workers in order to fill a vacuum in their enterprise, especially as it can be difficult to attract local workers to seasonal jobs, regional or remote areas or jobs with irregular working hours.
The 457 Visa is a temporary working visa that can be granted for up to 4 years. It is the Visa most regularly cited when employers consider engaging overseas workers. A 457 Visa can only be obtained for certain listed occupations. If the occupation is not an eligible listed occupation, the employer cannot sponsor an individual to work in the position. Some of the current occupations available for 457 Visa sponsorship which are relevant to the hospitality and tourism industry include Chef, Cook, Licensed Club Manager, Hotel Manager and Restaurant Manager.
While a potential employee may not be eligible for a 457 Visa, other working Visas have less onerous conditions and may allow for the short term employment of certain people. Employers should keep in mind that each Visa comes with its own set of obligations. A Working Holiday Visa does not require sponsorship from an employer, and it can be obtained independently by the applicant, providing they are from an eligible country and are within a certain age range. Once this Visa is obtained the Visa holder can work for any employer in any occupation, but only for a period of up to 6 months. Although the Visa itself does not impose obligations on the employer (apart from the 6 month rule), the employer must still comply with Australian workplace laws.
An employee on any working Visa will still be entitled to the benefit of the NES, superannuation and any applicable modern award requirements - the same as any regular Australian employee. An employer found to have breached workplace laws may not only be up for penalties under the relevant industrial laws, but also migration laws.
The Fair Work Ombudsman (FWO) has noted that employees on temporary working visas are open to exploitation and has shown a willingness to prosecute those employers that take advantage of them. In May the FWO revealed in a press release that those on Working Holiday Visas account for the highest level of pay disputes raised with the FWO and has also commenced several prosecutions this year involving employers in the tourism industry. This includes the prosecution of a cleaning company that engaged and underpaid four overseas workers on 417 Visas to work at an exclusive hotel in Perth, as well as the prosecution of motel operators that allegedly short-changing four Filipino workers more than $261,000.
While the hospitality industry is required to comply with the usual workplace laws applicable to most organisations, it also has its own unique obligations and requirements. There is the capacity through IFA’s and enterprise agreements to provide a degree of flexibility that the industry requires, as well as access overseas workers when unable to recruit local employees.