Restaurants brace for award ‘nightmare’

Industrial relations laws force higher operating costs

Lauren Wilson

South Australian restaurateurs fear their businesses will be the hardest hit when the Rudd Government rolls out its new award for hospitality workers as a part of its Fair Work Bill.

The state’s restaurant industry pays a 20 per cent loading for casual staff now, but this will rise to 25 per cent under a new award drafted by the Australian Industrial Relations Commission.

According to a KPMG report based on data supplied by the peak industry body, South Australia will face a 15.7 per cent increase in wage costs under the redrafted arrangements, which will come into effect next January.

This is significantly higher than the 5.4 per cent increase in wage costs expected to be felt by restaurant owners in Queensland and the wage decrease of almost 4per cent expected in Tasmania.

Bringing the states’ different awards into line under a national arrangement will be "a nightmare” for small restaurants in South Australia, said Sally Neville, CEO of the SA Restaurant and Catering Association.

"About 55 per cent of the workforce is casual, and the cost increase for wages in South Australia is expected to be 16 per cent,” she said.

"For business averaging a 3.8per cent profit to suddenly incur the cost — you will see job cuts, full-time staff working longer hours, and the end of expensive Sunday shifts.”

Despite owning a busy, award-winning Italian restaurant in Adelaide, Terry Soukoulis said under the new award he would have to cut back the hours of his employees as half of his staff are employed on casual contracts.

"I don’t think they understand the severity of the changes of an award like this,” he said. "Whoever drafted it never worked in a restaurant. If they did, they would realise restaurant owners work 100 hours a week and earn less than their staff.”

Mr Soukoulis, who besides running Auge restaurant is the vice-president of the South Australian restaurant association, said his business became profitable five years after opening in 2001.

"My head chef and my sommelier earn as much as I do. I become angry when I hear people saying workers in the industry are underpaid and poorly treated,” he said.

Louise Tarrant, head of the LHMU, the union representing hospitality workers, said the award was not meant to unfairly burden restaurant owners.

"What’s happening is a readjustment towards fairness,” she said. "If you look at the Work Choices period, most AWAs appeared within the hospitality industry, particularly for young vulnerable workers. These changes are very modest and not unreasonable. We don’t want anybody to lose their jobs.”

But Nick Papazahariakis, who owns Chloe’s Restaurant in Adelaide, said his operating costs would likely increase by 10-15 per cent, as most of his front of house staff were casual.

The Australian

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