The appointment of administrators to George Calombaris’ restaurant group, MAdE Establishment, serves as a timely reminder for other business operators in the accommodation sector on employee entitlements.
Certain industry commentators have blamed the practice of the Fair Work Ombudsman “naming and shaming” businesses who come clean and self-report wage payment irregularities of causing or significantly contributing to the failure of Calombaris’ business and other businesses in similar circumstances.
Such action by the Ombudsman can have a devastating effect on the goodwill of a business where the public, instead of putting their support behind a business trying to do the right thing, which will increase cash flow and ensure staff remain employed, will shun the business jeopardising its viability and the livelihoods of the employees.
The takeaway for accommodation businesses is to ensure that employees are being correctly paid before this situation arises. Accommodation operators should consider the following on employee entitlements:
If operators are engaging independent contractors they should obtain legal advice on the circumstances and the terms of their written contracts. Written contracts should be in place and contain terms which are designed to mitigate against the risk of any claim of ‘sham contracting’.
If operators have employees they should ensure those people are properly classified (i.e. casual, part-time or full-time) and they have signed employment agreements which correctly identify any award and entitlements for the employee.
Operators should also ensure that appropriate worker compensation insurance for their application State is taken out for both independent contractors and employees (i.e. Workcover in Queensland, Workers Compensation Insurance in New South Wales).
Most motel workers will likely be covered by the Hospitality Industry (General) Award. The award will apply unless the business has entered into an enterprise agreement or other registered agreement setting out the minimum employment conditions. Such agreements may be costly to negotiate and inappropriate for most small to medium operators.
If accommodation operators obtain good advice and develop and maintain good systems they should be able to avoid the pitfalls, which have affected quite a few otherwise successful businesses recently highlighted in the media.
The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.