“The expectation of the level of competence was a lot higher pre-pandemic and now you’ve got to take that extra time and effort to get them up to the level.”
Hospitality is often a tough industry with business failures common. Bureau of Statistics data shows the pre-tax profit margin in the industry was about 6.5 per cent pre-pandemic, with wages and salaries a significant cost at about a quarter of turnover. The sector’s margins are relatively low at about half those of the overall private sector economy.
Yet hospitality, which employs about 900,000 people, is diverse. It ranges from often struggling cafés and smaller restaurants to giant hotel and pub empires that can make hefty profits. Some of Australia’s richest people, such as Justin Hemmes, have made or inherited fortunes from the sector.
A worker from one of Sydney’s giant clubs, Dave, who preferred not to name his current employer to protect himself from repercussions, says the pandemic opened up options for hospitality workers.
“A lot of people during the pandemic realised there were a lot of opportunities out there, and you don’t have to deal with the stress of dealing with customers or customer abuse,” he says.
“In warehousing, in pick and pack, you can make up to $35 an hour – that’s for a day shift. Why would you work for $22 an hour in a day shift in an environment where you could be abused and have to deal with drunks?”
Dave has been in the industry for a few years, after a career in customer relations management, and has been surprised at the treatment of staff and the level of worker turnover.
“You’re expected to have 24/7 availability, and you get paid $22 an hour … it’s almost impossible to plan in advance what you’re going to be doing. Hospitality customer service has so long been treated as unskilled work [but] it couldn’t be further from the truth.”
Dave is paid the minimum award wage as a permanent part-time worker.
It has also been a sector beset by wage theft; one of the worst few in the country according to the Fair Work Ombudsman while media investigations unearthed widespread labour abuses, in particular at leading restaurants. The union presence in the sector is weak. In 2020, just 1.9 per cent of workers in accommodation and food services were members.
United Workers Union national secretary Tim Kennedy says the labour shortages are a product of the pandemic and the heavy reliance of the industry on temporary migrant workers. “They were subject to wage theft and exploitation, and we told them to go home,” he says. “They haven’t come back.”
Kennedy says getting these workers back involves giving them greater rights and a better pathway to permanent residency. The UWU, along with the broader union movement, wants a significant overhaul of labour laws to make going on strike easier and to bargain across a sector, industry or supply chain.
“There is no incentive for employers to bargain at all. They can simply shift wages share over to profits. Wages are determined by what an employer wants to share.”
Connolly wants a return of migrant workers, but says Australia’s reputation is “pretty tarnished at the moment.” There’s a need for other changes too.
As a young man, he took a five-year break from the industry after being burnt out doing 90 hours a week for just $40,000 a year. He says employers need to do better to ensure everyone “is properly compensated for their time”.
“We’re trying really hard to add a work-life balance that didn’t exist when I was in the industry.”
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