Unions Advocate To Increase Casual Overtime Pay In Hospitality Sector

Published July 29, 2019 (last updated July 22, 2020) -

Unions are advocating to lift casual worker overtime pay by 25 per cent in hospitality businesses – but employer advocates warn it is a cost they cannot afford – only discouraging them to hire casuals.

United Voice will on Monday put forward its case for the Fair Work Commission (FWC) to require employers to pay casuals their 25 per cent loading on top of their overtime penalty rates for the restaurant, hospitality and clubs Awards.

The new application follows last year’s FWC decision, allowing casuals to be entitled to overtime pay if they work more than 12 hours a day or more than 38 hours a week.

The NSW Business Chamber argues that casual loading compensates for lack of permanent entitlements, including annual and personal leave, but as those entitlements do not accrue for permanents during overtime the loading should not apply.

NSW Business Chamber CEO Stephen Cartwright said United Voice’s latest case was one of “the union trying to have its cake and eat it too.”

“We accept that casual employees should be paid overtime, at the same rate as permanents. But claiming a casual loading during overtime makes no sense when the loading has never compensated for entitlements relating to overtime.

Mr Cartwright said “if the union claims are successful it will have the impact of increasing the cost of casual employment to the point that it will disincentivise these employees getting work.”

“This is just an attempt to increase pay rates by 25 per cent at a time that employers cannot afford this type of cost.”

Senior Employment Relations Adviser at Employsure, Michael Wilkinson, said the heat was already on the hospitality sector to ensure they are paying their staff correctly as celebrity chefs George Calombaris and Neil Perry deal with the fallout of underpayment scandals.

“Thirty percent of calls from our clients in this sector will relate to basic employee entitlements, so it’s clearly an area where they struggle.

On the matter of casual entitlements, Mr Wilkinson says, small business owners are already facing a complex web of red tape and a raft of workplace relations legislation that is constantly being amended by the workplace relations tribunal.

“The viability of offering casual work is being actively reconsidered by many Australian businesses. The concern is that employment becomes too expensive and businesses will explore alternatives.”

“There will, of course, still be casual jobs – and many employers will work within the law. However, we anticipate that there will be a clear impact on the availability of work where businesses are unable to operate within the more rigid requirements for casual employment.”

But United Voice argues that is a reason to grant its application as it would make permanent employment “a more attractive choice” for employers and relieve casual workers with permanent jobs.

“If a casual employee is consistently working hours in excess of 38 per week, the cost structure of the award should inform an employer to offer that person a permanent position,” its submission said.

The union argues the idea that casual loading simply makes up for permanent entitlements accrued in ordinary hours is “misleading” and claims the loading is meant to deal with casuals’ precarious nature of employment.

United Voice national secretary Jo-anne Schofield said casual overtime “should as far as possible be the equivalent to the overtime entitlements of full-time and part-time workers.”

“There should not be a cost incentive for employers to over utilise casuals for long and harmful periods of time.”

According to the latest data from the statistics bureau, hospitality has the highest use of casuals across sectors, and 11.7 per cent of casual employees work paid or unpaid overtime.

The data also revealed that on average, casuals are lower paid than permanent employees and 43 per cent, want to work extra hours.

The upcoming hearing is the first set of Awards, where overtime pay for casuals will be contested, with other awards including the education and agricultural sectors to be considered.

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