Typical Legal Issues Facing Hospitality Businesses

Hospitality businesses are an integral part of the business community, not just providing us with our daily coffee and lunch, but contributing significantly to the economy. In this hustle and bustle industry, it is not uncommon for business owners to neglect legal issues affecting the operation of their business.

The following is a brief snapshot of the legal issues typically facing hospitality businesses.

Employment

The majority of employees employed in hospitality businesses are subject to award conditions. These awards will set down minimum entitlements to:

  • penalty rates
  • overtime loadings
  • allowances
  • minimum and maximum hours of work

The awards applicable to hospitality businesses vary from State to State, and according to the particular type of hospitality business.

From 1 January 2010, this multitude of awards will be largely replaced by 3 modern awards which will apply nationally:

  • the Hospitality Industry (General) Award 2010
  • the Fast Food Industry Award 2010
  • the Licensed and Registered Clubs Award 2010

Each of these modern awards contain uniform penalty rates, overtime loadings and allowances applicable to all employees Australia-wide. The only method by which these minimum award entitlements may be displaced is through the development and implementation of a registered workplace agreement.

Migration

Hospitality has been hit hard by Australia’s shrinking jobs market. Chefs were the occupation with the highest levels of skills shortages in December 2008 and food-related tradesmen came in at number six. Not surprisingly, many hospitality businesses are looking offshore for suitably skilled and experienced chefs. Other positions which are being filled with overseas workers include hotel managers and club managers.

The relevant visa for overseas workers is the Temporary Business (Long Stay) – Standard Business Sponsorship (subclass 457), commonly known as the 457 visa, which allows visa holders to work in Australia for between 6 months and 4 years. Employers can sponsor overseas employees on 457 visas for a period of up to 2 years.

Sponsorship of workers on 457 visas carries with it a number of obligations on an employer, including, but not limited to:

  • payment of a prescribed minimum salary level
  • adherence with all workplace relations obligations which apply to Australian workers
  • payment of all medical and hospital expenses which are not met by health insurance
  • ensuring that the cost of return travel for the employee (and accompanying family member/s) is met to return them to their home country

It is therefore critical that employers understand their sponsorship obligations and how to minimise their compliance costs.

Conclusion

The above outlines just some of the legal issues typically faced by hospitality businesses. The good news is that MST has a long history of working with such businesses to ensure that all of their obligations are met, and that the business is being run optimally.

Author: Katrina Sweatman