Push to end penalty rates will backfire

An end to weekend penalty rates for restaurant and catering workers would add to an already severe skills shortage and significantly lower standards in the hospitality sector, according to a leading workplace relations expert at the University of Sydney Business School.

The Restaurant and Catering Industry Association, representing restaurant and cafe owners, says it will appeal against last month’s decision by the Fair Work Commission to reject its case for an end to most weekend penalty rates.

The Business School’s Angela Knox, says skilled workers, who are already in short supply, will simply refuse to work on weekends if they are not compensated for doing so. Dr Knox, a senior lecturer in work and organisational studies, is currently examining job training and skills in the restaurant and catering sector, which employs more than 140,000 Australians.

“Cafés that belong to big standardised chains have little difficulty finding employees because they require more generic skills,” said Dr Knox. “Specialty cafés, on the other hand, are facing real challenges when it comes to finding the high level, specific skills they need.”
Dr Knox says that specialty cafes in Australia, which are amongst the best in the world, are often paying up to 20% above award rates for the right people. “The problem is that the industry is failing to provide adequate training through TAFE and college courses. As a result, individual cafés are being forced to train staff while they are on the job,” she said.

The Restaurant and Catering Industry Association claims that many members simply cannot afford the high rates and are closing their doors on weekends. But Dr Knox says an end to penalty rates will mean that fewer experienced workers will be prepared to work on weekends and there will be little incentive for workers to stay in the industry. “Removing penalty rates is more likely to exacerbate existing shortages of skilled labour, which will only damage the industry” Dr Knox said.

Despite the current debate over penalties, Dr Knox believes that restaurants and specialty cafés offer young Australians long term and satisfying career opportunities.

“Too many young people regard this kind of work as no more than a holiday job or a way of paying their way through university when they ought to be considering a career in restaurants and cafes,” she said. “Australia has a very good reputation in this sector and skills gained in it can be transported to any part of the world, in fact they are sought after.

“Pressing for an end to penalties will only hurt the industry in the longer term,” Dr Knox concluded. “It’s time for the Restaurant and Catering Industry Association to wake up and smell the coffee.”

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