|We need to talk about the lack of compliance in the hospitality industry.
The last few years the hospitality industry has fallen into unfavorable light since the Fair Work Ombudsman (FWO) implanted audits on compliance standards, setting off a landslide of complaints from employees that listed the shortcomings of their employers
To catch you up: the Fair Work Ombudsman (FWO) was founded in 2009 with the aim to “promote harmonious, productive and cooperative workplace relations”, in other words, they make sure that employers abide by Australian workplace laws.
Since their inception, the FWO has become famous for uncovering gross amounts of exploitation, coercion, and wrongful dismissal of employee’s within the hospitality industry. According to recent reports, the hospitality industry holds the highest number of anonymous reports received (36%), infringement notices issued (39%) and court actions commenced (27%).
It all begins with a complaint anonymously issued to the FWO.
The FWO appoints Fair Work Inspectors who are instructed to investigate workplace complaints and enforces compliance with national workplace laws.
The FWO issue’s quarterly reports of their finding. The most substantial penalty ever recorded was issued last year in the hospitality industry; A café in Albury. The café was charged over $500,000 for coercing employees to pay back a portion of their wages by threat of violence, dismissal and withdrawal of visa.
Of course, not all cases are as extreme as the café in Albury. Regardless, the rate at which complaints are being reported and penalties are being issued is far more present in the hospitality industry. In fact, the average rate of non-compliance for restaurants, café’s, and catering is 52%. Failure to issue a pay slip has become the most prominent cause of non-compliance in the hospitality industry.
One in ten disputes resolved by the FWO last financial year involved a restaurant, café or catering service. This is particularly note-worthy when you consider that the hospitality industry only accounts for 7% of the labour market.
So, what’s the problem? Are the national workplace laws set in Australia simply too high, making compliance for most companies next to impossible?
In our opinion, no. The standards set by the FWO are neither unfair, no unachievable. Octopus has maintained compliance with national workplace laws, and we know first-hand the standards are reasonable and necessary to ensure the well-being of workers in Australia. But we are still left with the question – why are so many companies non-compliant?
It’s simple, this is a case of the strong exploiting the weak.
In 2016 – 17, 44% of the hospitality workers assisted by the FWO were under 25 years old and 31% were visa holders.
At the beginning of 2018, Natalie James, FWO agency executive, informed audiences at the annual national policy influence reform conference that visa holders are one fifth of those seeking help from the FWO. “Being new to the Australian labour market, desperate to hold onto a job, and primarily concerned about their visa” are the reasons that Mrs.James lists, which mark the cohort of visa-holders as particularly vulnerable to exploitative practices.
“Our dispute forms are much more likely to come from a worker on a visa” voiced Natalie James. She added that in 2012-13, 8% of the disputes the FWO resolved were form visa holders. As of three months ago, 20% of disputes were from visa holders. This is particularly impactful when you consider that the hospitality industry cohort is only 7% of the labour market.