Discussion Paper. Exploring a template Labour Agreement for the Tourism and Hospitality Sector

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1 Discussion Paper Exploring a template Labour Agreement for the Tourism and Hospitality Sector SUBMISSION TO Department of Immigration and Citizenship March 2012 This submission has been prepared by the Australian Hotels Association (WA)

2 Table of Contents Introduction... 3 Tourism and Hospitality Overview... 3 Feedback from AHA(WA) Members... 4 Addressing Labour And Skills Shortages... 4 Discussion Paper... 6 Purpose... 6 The Labour Agreement Program... 6 How would an employer access the Labour Agreement Program?... 6 What would an industry template Labour Agreement allow employers to do?... 6 Responses To Questions... 7 Recommendations Conclusion

3 Introduction The Australian Hotels Association WA [AHA(WA)] is the authoritative body for the vibrant hospitality industry in Western Australia. As an organisation of employers in the hospitality industry, the AHA(WA) represents over 700 members across the state including hotels, accommodation properties, taverns, restaurants and special facility licenses and provides professional services to the industry. The AHA(WA) represents the rights and interests of the hotel industry to government at a local, State/Territory and Federal level, as well as to other relevant parties and the general community. AHA(WA) provides industry leadership, lobbies on members behalf and promotes best practice in hotel and hospitality management, with a commitment to effective communication with members. AHA(WA) actively contributes to the development and growth of tourism and tourism-related industries. The overarching objective of the Australian Hotels Association (WA) is to effectively contribute to the establishment and maintenance of an economic and social environment that fosters the business success of members. Within the diverse Western Australia hospitality industry, AHA(WA) membership incorporates CBD, metropolitan, regional and rural hotels and pubs, accommodation hotels, resorts and similar businesses. The AHA(WA) represents over 80% of all hotel venues. In addition to this, membership of major hotel accommodation chains, including Burswood, Hyatt, Pan Pacific, Hilton, Rydges, Intercontinental, Accor etc. The Western Australian tourism industry is one of the fastest growing in the world at present. It is therefore vital that the hotel and tourism sectors in WA be represented at a level which allows for their growth and expansion. The Western Australian economy is two speed. Hospitality businesses require workers to operate businesses at its peak operations. However, there are difficulties in finding workers at all levels of the business from bar attendants to managers, because of a variety of factors including the mining boom. There is a critical and serious shortage of labour in Western Australia. Tourism and Hospitality Overview Our 700 members employ approximately 45,000 workers in Western Australia. Hospitality plays a huge part in the tourism sector in Western Australia from Esperance to Kununurra. Given the level of customer service involved, tourism and hospitality operating businesses are highly labour intensive. This sector is dominated by a significant number of small to medium sized businesses. 3

4 Hospitality businesses in Western Australia operate in a highly complex environment relating to Workplace Relations and Employment Law, Occupational Health & Safety, Liquor Licensing and Health legislation. It is expected that business employment growth for just the next 12 months will be at 5%. There is currently a serious shortage of labour within the State of Western Australia for hospitality workers, and this will continue to be a critical issue for the tourism and hospitality industries. With the employment situation at such a critical point, the need to supplement skilled and unskilled labour is at pandemic levels. Action must be taken immediately to assist hospitality businesses to meet operational requirements otherwise it will affect business and leisure tourism from interstate, intrastate and overseas sectors. Feedback from AHA(WA) Members The AHA(WA) has sought feedback from its members to assist the formation of this submission. In addition to receiving written comments from our membership, there has been high level industry discussions with the accommodation sector and key regional hospitality properties. The age limit for eligible workers is to be set at 45 years of age. Addressing Labour and Skills Shortages Western Australia s hospitality and tourism businesses require government to deliver an effective strategy to address the severe and critical skills and labour shortages that exist in this State. Labour shortages are a major concern for metropolitan and regional hospitality businesses. Over 80% of our membership are finding labour to be scarce and this problem is expected to get severely worse and critical in the next few years. It has been reported that economic growth in Western Australia will return to high levels and consequently will be critical that labour and skills shortages be addressed urgently and as a high priority. 4

5 Should the Western Australian economy reach its full potential in the short, medium and long term, this will cause massive problems with a shortage of workers. As we previously found out in 2007, businesses closed part and/or reduced its business operations due to a lack of supply of workers. When this occurs it affects the capacity of the hospitality and tourism industries in providing basic needs such as food, beverage and accommodation services. Unemployment in Western Australia is low level (currently at 4%) and is expected to continue to decrease in future years. To immediately address the labour shortage, we need workers to fill the gaps within the hospitality industry. The Government can assist by allowing workers from English speaking countries such as USA, UK and Ireland to work in Western Australia without certain restrictions. The workers in those countries should not be required to meet the criteria for the International English Language Testing System (IELTS) and skills assessment, but instead, show demonstrated experience of at least two years working in the position they are applying for. This allowance would certainly assist and benefit the hospitality and tourism sector in Western Australia. Further, workers from these countries should be fast-tracked to assist with the urgent needs and requirements of the hospitality industry in Western Australia. The evidence is clear and specific that there is a serious labour and skills shortage within the whole state of Western Australia. 5

6 Discussion Paper Purpose The AHA(WA) acknowledges that there is a severe and critical labour and skills shortage within the hospitality sector in a range of occupations from unskilled positions such as bar attendants to skilled and qualified positions, such as chefs, cooks and managers. The Labour Agreement Program The AHA(WA) fully supports an industry Labour Agreement. Our view is that Western Australian hospitality businesses should have an AHA(WA) Labour Agreement specific only to those hospitality members who are members of the AHA(WA). How would an employer access the Labour Agreement Program? Having a specific AHA(WA) Labour Agreement will ensure hospitality member properties are:- Have a genuine interest in requesting overseas workers; Meet all workplace and industrial relations laws based on Federal or State legislation; Provide a commitment to train or up skill existing workers; Meet the English and skill level requirements; Provide pastoral care to workers; and Provide overseas workers with an induction or orientation plan. What would an industry template Labour Agreement allow employers to do? A specific Western Australian AHA(WA) Labour Agreement would benefit membership and DIAC by streamlining the application process. Members would need to meet the criteria, the application would be vetted by AHA(WA) and then forwarded to DIAC for approval. The terms and conditions of formulating a Western Australian AHA(WA) Labour Agreement would benefit all parties to the agreement and assist with the serious and critical labour and skills shortage that exists within this State. 6

7 Responses To Questions How should employers be identified as belong to the industry in order to be allowed to access the template agreement? The Department would expect that either this is done by only having occupations very specific to the industry available under the template or by having a very clear definition of tourism and hospitality that employers must meet. What would be the best approach? Hospitality members would be identified as belonging to an industry as being a member of the AHA(WA). The AHA(WA) is a registered organisation under: - Fair Work (Registered Organisations) Act 2009 (Cth) - Western Australian Industrial Relations Commission under the Industrial Relations Act 1979 AHA(WA) is a non profit organisation and has approximately 700 members. The occupations listed under the template should be specific to the hospitality industry and should be in the ANZCO Skill Level 1 4. For example, the following classifications should form part of the Agreement, those being: Baristas Bar attendants Receptionists Hotel or motel receptionists Waiters Cooks Hotel service managers Gaming worker Beauty therapist The definitions and classifications for workers in the hospitality businesses are very specific to Industrial Awards such as: Federal Awards for Constitutional Corporations o Hospitality Industry (General) Award 2010 o Restaurant Industry Award 2010 State Awards for Non Constitutional Corporations o Hotel and Tavern Workers Award 1978 o Restaurant, Tea Room and Catering Workers Award

8 In addition, it is important to note that minesite catering is NOT a hospitality or tourism business, and should not be included within the Agreement, or any template Labour Agreement within the hospitality or tourism industry. Should occupations that are available under the standard program be made available under a template labour agreement? What benefit would there be to such an arrangement? What sources of information are available about labour market conditions in areas where there are shortages of skilled workers in the tourism and hospitality industry? Western Australia, in 2011, was given regional status under the Regional Sponsored Migration Scheme (RSMS). Occupations under a State Migration Plan, or 457 or RSMS should not be combined into a Labour Agreement, as the 457 visa and RSMS provides businesses to accommodate those positions, such as chefs, pastry cooks or hotel and motel managers. All classifications within this template Labour Agreement should meet the minimum salary/wage requirements as prescribed by Federal or State Industrial Awards and Agreements. Western Australia is experiencing a mining boom which impacts and affects hospitality and tourism businesses in many ways. Metropolitan and regional properties are experiencing a shortage of workers to meet operational requirements of the business. In addition to this, the mining industry is sourcing its hospitality labour such as cooks, chefs, room attendants, cleaners, bar attendants etc. directly from the existing labour pool. This itself opens a large hole, where these workers are not replaceable because of factors such as: low employment levels no availability of unskilled or skilled labour A business would need to provide evidence of job advertisement to prove that there were no suitable applications received for the position. With the low employment rate in Western Australia and the expected employment growth of at least 5% in the next 12 months, hospitality businesses in both the metropolitan and regional areas will be struggling to open part or all of their operations due to the inability to source labour for skilled and unskilled positions. 8

9 How should employers wishing to access the template agreement identify themselves as being part of the tourism and hospitality industry? There are many ways that a business can provide evidence as being part of the hospitality industry. For example: Being a member of the AHA(WA); By the nature of their business, ie hotel, accommodation property, tavern, restaurant, casino or club; How their employees are paid in accordance with Federal or State legislation such as a hospitality Award or Agreement; Very specific job titles, classifications and duties. Stakeholder feedback is sought in relation to this list of occupations, the level of qualification appropriate for these as skilled workers and the nature of any concessions that the industry seeks. From the list of occupations listed in the discussion paper, the following would be deemed appropriate for the Western Australian hospitality sector: Occupations ANZCO Skill Eligible for Salary code Level standard comment 457? Cook Y Industrial Award or Agreement Hotel Service Manager N Industrial Award Includes Front Office or Agreement Manager (Hotel) Head Housekeeper Head Porter (Hotel) Hotel Concierge Hotel Office Manager Bar Attendant & Barista N Industrial Award or Agreement Beauty Therapist N Industrial Award or Agreement Food & Beverage N Industrial Award Attendant (includes or Agreement waiter, sommelier) Gaming Worker N Industrial Award or Agreement Receptionists N Industrial Award or Agreement Motel or Hotel N Industrial Award Receptionist or Agreement 9

10 Should the template labour agreement be available only to regional employers or to all employers in the tourism and hospitality industry? In Western Australia, the industry shortages are no different in the metropolitan roles than that of rural areas. Rural tourism battles with additional pressures that a high Australian dollar and lower levels of tourism create; less travellers. The entire country and more importantly Western Australia, battles with the effect and pressures of a two speed economy and the resources sector. The improved standards of living and development of rural cities make living in remote resource areas more attractive, this further reducing barriers to employment. This fact will continue to place upward pressure on employment in our cities. Hospitality labour and skill shortages affects all parts of Western Australia, including both metropolitan and regional areas. There are high vacancy rates for all classifications and positions within the state. For instance: In metropolitan area, workers are in high demand in accommodation hotels, pubs and restaurants; Regional Western Australia is also in high demand as well as each region has peak seasons, for example, for Broome from March, Kalgoorlie is all year round and Margaret River from September; Both areas have urgent and critical needs in finding workers to meet operational requirements. The AHA(WA) is of the opinion that a template Labour Agreement is for the whole State of Western Australia. To streamline and simplify the process to create less confusion, we recommend two Labour Agreements: o AHA(WA) Hospitality Labour Agreement for workers from USA, UK and Ireland; and o AHA(WA) Hospitality Labour Agreement for workers from overseas 10

11 What are the market salary rates for Australian workers in these positions in different regions in Australia? What other terms and conditions of employment, including salary packaging are provided to workers in these occupations? Is there room for employers to improve the provision of salary and other terms and conditions to better attract workers? Market salary rates are determined by a number of factors, these being: TSMIT market salary for 457 visa employees; RSMS as per Federal and State Awards and Agreements; Position and classification of employee. For example, if a business had to pay the TSMIT of $49,330 for a bar attendant, this would not be feasible. The industrial award prescribes a base rate of pay plus appropriate loadings/penalties for full time workers. We say that workers who are not on the State Migration Plan should be paid the same as other Australians and workers doing the same job; and Workers rates of pay and salaries are determined and prescribed by the relevant Federal or State industrial Agreement, which determines the market salary rates for workers, for that classification. Federal and State Industrial Awards and Agreements allow for: Salaries to be annualised; Accommodation on site to be deducted; and Meals to be deducted. The Federal and State Industrial Awards and Agreements allow for the minimum rates of pay to be paid to an employee for a specific classification/occupation. A business can make a commercial decision to pay more than the prescribed rate. 11

12 What skill and experience requirements and assessments processes should be set to ensure overseas workers have the right skill set to effectively perform these positions in Australia? Workers should have the skills and experience to perform the tasks specific to their area of expertise, and qualifications alone should not be relied upon. For example: A Barista who has the skills to make an excellent coffee, should not be required to meet the Certificate II requirement; A Front Office Manager, who works for a 4 or 5 star hotel, who possesses the required skills should not be required to meet Certificate III requirements, especially if they are applying for work at the same chain of hotels or has worked for the chain previously, ie. Hyatt has the same system worldwide. The employee has the skills and experience, why do they require a Certificate? Should the view of DIAC be that qualifications are deemed necessary, the worker should be given an opportunity to complete the Certificate requirements in Western Australia and enrol in the appropriate course relevant to their needs. The industry needs workers with demonstrated experience and qualifications such as Certificate II or III should not be relied upon solely to determine whether an overseas worker has the right skill set to perform the position. It is not currently a pre-requisite for Australians to have a Certificate II or III to meet the selection criteria for positions in hospitality, so it does not make business or common sense to discriminate against overseas workers, especially in countries that do not meet the same educational requirements as in Australia. Workers from USA, UK or Ireland should not be required to meet the IELTS or skills assessment. These workers have the demonstrated experience as they speak English proficiently and if they can show at least two years work experience in that particular position, this should be sufficient to meet the skills assessment criteria. 12

13 Is this proposed policy setting appropriate? If stakeholders consider that lower levels of English are justifiable, what measures should employers be required to put in place to ensure that workers are aware of their rights and responsibilities in the Australian workplace, can interact successfully with customers and co-workers, and can participate actively in the community in which they live and work? The English language requirement is an important criteria especially for overseas workers who do not have English as their first language. An English IELTS testing of 4.5 average on the 4 components should be considered. There should be exceptional circumstances for a worker who does not meet all the components of the IELTS testing. For example, in many specialised areas of hospitality, workers are required to provide excellent service to clients by being able to speak good English, e.g. Bar Attendants and Managers. They should be able to have the ability to speak English at a good level and engage conversation with clients, an important part in providing a high level of service to clients. Therefore, despite having the ability to speak a high level of English, their written English may not meet the IELTS standard of 4.5. In cases where workers do meet the spoken English and listening requirements but fail in other areas, we strongly recommend they be approved subject to the worker undertaking English classes, whilst in Australia. In metropolitan areas and major regional areas, this can be accommodated. For those regional areas where there is no access to English educational facilities, the English can be assisted and developed by members of the Church, local Council or by the local school. As previously raised in this submission, we believe that workers from USA, UK or Ireland should not be required to meet the English requirements as this is their first language. In addition to English speaking abilities, pastoral care living and being accepted in the community is an important aspect for workers arriving from overseas, who are generally without family and friends. We would encourage our members to: Establish links with the local community of the country of origin, for example, a worker arriving from Indonesia would be given details about the local Indonesian community that exists; Ensure that there are substantial processes in place for pastoral care and where to go for assistance; Have the AHA(WA) produce an information kit or conduct an Induction and Orientation Course to assist new workers by providing information on: o Wages and entitlements 13

14 o Transport, accommodation, finances (ie. open bank account) o Local communities and religious obligations o Occupational Health & Safety in Workplace o Have a 24 hour hotline number available o Provide pastoral care details o This could be arranged also by individual large hotels or accommodation properties that have a Human Resource (HR) Department. Those workers who do not have a HR Department, the AHA(WA) would conduct courses for new worker o Recommend strongly to our member properties that a buddy system or mentor arrangement exist within the property, not only during work hours, but for the worker to call the buddy outside work time should an issue arise. Are these training requirements sufficient to ensure employers are investing in the up-skilling of their Australian workforce? Western Australians provide a great experience in hospitality service. A business prides itself on maintaining good service and high standard of the provision of services such as food, beverage and accommodation. Therefore, we strongly agree that the current benchmarks for training are retained as it gives Australian workers an opportunity to be up-skilled and to obtain further skill development within their area of expertise. These are the workers who want to work and have a career in hospitality. In addition, the employer must satisfy the requirement that they have no more than 40% of its full time workforce from overseas residents. Are there merits in the inclusion of a permanent visa pathway under a template labour agreement? Responses from AHA members have has established that: Permanent pathway is not offered to workers; Maximum of three (3) years employment with the nominated sponsor; An offshore application cannot be made for a further three months after completion of a term of sponsorship; and The worker must return home to country of origin before making a further application, and this be restricted to two years for the second placement. 14

15 The permanent pathway is not offered to the workers, and they must return to their country of origin on completion of their contract. There would be opportunity for the worker to undertake additional study in Certificate III or IV and in English, to meet the 857 or 457 visa qualifications. If the worker studies and complete the necessary courses and certificates they would be eligible and have an opportunity to apply for a 857 or 457 visa offshore. This Labour Agreement is not intended to keep workers here for an indefinite period. The three year period for the worker to remain with the sponsor would assist with the labour and skill shortage that exists. At the end of the three year term, should an employer wish to make another application under the template Labour Agreement, then this should be made offshore and for a further maximum of two years for each application. The AHA(WA) believes that there are not merits in the inclusion of a permanent visa pathway because this Labour Agreement is to source workers for a specified period of time. 15

16 Recommendations In making our submission to the Department of Immigration and Citizenship, AHA(WA) recommends; 1. AHA(WA) wishes to be considered for a specific Western Australian Labour Agreement for hospitality businesses who are members of the AHA(WA). 2. To address the severe and critical labour and skills shortage, we suggest that workers from English speaking countries such as USA, UK and Ireland only need to demonstrate two years of practical experience and are not required to meet the IELTS or skills assessment criteria. 3. To streamline and simplify the process to create less confusion, we recommend two Labour Agreements for the whole State of Western Australia: o AHA(WA) Hospitality Labour Agreement for workers from USA, UK and Ireland; and o AHA(WA) Hospitality Labour Agreement for workers from overseas 4. An English IELTS testing of 4.5 average on the 4 components should be considered. There should be exceptional circumstances for a worker who does not meet all the components of the IELTS testing. In cases where workers do meet the spoken English and listening requirements but fail in other areas, we strongly recommend they be approved subject to the worker undertaking English classes, whilst in Australia. We suggest a: - minimum 4.5 for speaking and listening; and - reading and writing if below 4.5, workers to study English during their employment until they meet the required standard. This English requirement would not apply to workers from USA, UK and Ireland who are from English speaking countries and they would be exempt from this requirement to meet the IELTS standards. 5. Skills assessment to be relative to the worker s position and the certificate qualification is reviewed. If a worker has demonstrated experience, i.e. 2 years and does not hold a Certificate II or III, then the worker after arriving in Western Australia shall be given a certain time frame to complete the Certificate requirements. Workers from USA, UK or Ireland would also not have to meet the Certificate requirements. 6. Classifications of Occupations to be included in a Hospitality Labour Agreement would need to meet the ANZSCO level 1 to 4. These positions would be: 16

17 Bar Attendant ANZCO Skill Level Barista Skill Level Hotel or Motel Receptionist Receptionist General Waiter Skill Level 4 Skill Level 4 Skill Level Cook Skill Level Gaming Worker Beauty Therapist Hotel Service Manager Skill Level 4 Skill Level 4 Skill Level 3 7. We do not endorse a pathway to residency for workers. However, we would encourage our members to develop an educational training plan for workers who could apply for a 457 or 857 visa at a later date after they meet the IELTS and skills requirements. 8. The duration of the sponsorship between an employer and worker is for a maximum period of three years. 9. On completion of the term of employment arrangement, the worker to return to country of origin. The worker must wait a period of three months before making a further application, and this second application is restricted to a term of two years. 10. The age limit for eligible workers is to be set at 45 years of age. 11. Training benchmarks A and B to be retained. 12. A business would need to provide evidence of job advertisement to prove that there were no suitable applications received for the position. 13. The employer must satisfy the requirement that they have no more than 40% of its full time workforce from overseas residents. 14. Pastoral care to be made available to workers from overseas. 15. An induction and orientation programme to be developed and delivered by AHA(WA) or provision of an induction kit. Should a hospitality business have adequate human resources in-house to manage this, the AHA(WA) programme would be provided to them for delivery. 16. Terms and conditions of employment and salaries/wages paid to workers to be in accordance with the relevant Federal or State Industrial Instrument. 17

18 CONCLUSION The AHA(WA) is available to provide further information to the Department either by written submission or in person. Please contact Ron Ballucci, Employment Relations and Regulatory Advice Manager on (08) or 18