Employment Relations in the Resorts of North-East New South Wales

Beginning of article

The tourism and hospitality industry is perceived as being a major contributor to employment growth in Australia and in north-east New South Wales (NSW) in particular. Despite the importance of the sector there has been very little empirical research into employment relations in the industry. This appears to be a major oversight because labour is crucial to gaining a sustainable competitive advantage and in determining the productivity of the industry. This article helps to overcome this problem by analysing the employment relations in the resorts of north-east NSW, an important sector of the region's hospitality industry and economy. The study examined the employment instruments used, methods of employee selection, remuneration policies, training, and occupational health and safety. The findings indicate that the larger foreign-owned organisations have adopted a more formal approach to these functions than the smaller Australian-owned resorts who have, nevertheless, started to adopt a more professional approach to employment relations strategies.

INTRODUCTION

Many regional economies throughout Australia have undergone substantial restructuring since the 1970s resulting in high levels f unemployment and related problems. The hospitality industry, in conjunction with the tourism industry, has been perceived as an emerging industry capable of providing an immediate and on-going 'panacea for economies in crisis' (Craik, 1991:2). The hospitality industry, since the late-1970s, has made a notable contribution to employment creation. It is predicted to make an even greater contribution in the future with domestic visitor nights spent in Australian hotels, resorts, motels and guesthouses likely to increase by a rate of 2.7 per cent per annum from 2001. International visitor numbers are expected to expand by 7.3 per cent annually until 2012 (Department of Small Business and Tourism, 2002).

The tourism and hospitality industry is an important component of the Australian economy. In 2000-2001, the industry contributed 4.7 per cent to GDP, which amounted to $31.8 billion (Department of Small Business and Tourism, 2002). The industry category contributed 6 per cent to Australia's total employment. The sector directly employed 551 000 people by mid-2001, an increase of 35 000 people since 1997-1998 (Department for Small Business and Tourism, 2002). Furthermore, according to Bureau of Tourism Research estimates, 'the sector indirectly employed an additional 340 600 people (in 1997-98), or another 4 per cent of those employed' (Department for Small Business and Tourism, 2002: 9). The actual accommodation section of the hospitality sector employed 99 000 people in 2000-2001 (Department of Small Business and Tourism, 2002: 42).

The domestic and in particular the international viability of the hospitality (and tourism) industry, a labour intense industry, depends upon ensuring a sustainable competitive advantage through a number of factors, including increased labour productivity and flexibility and decreased labour costs (ILO, 2001).

The hospitality industry is labour intensive with wages comprising the largest single cost item. Labour expenses for the industry in 1998-99 amounted to 25.5 per cent of total operating costs (ABS, 2002). It is also one of the few costs in the production chain that can be varied according to demand. Therefore, in the hospitality industry 'labour and productivity are treated as inseparable' (Timo and Davidson, 1999: 20). Despite the importance of labour to the productivity of the industry there is a paucity of empirical research into the employment relations in the sector (Buultjens, 2000), especially in the regional context. This article helps to overcome this oversight by examining the employment relations in resorts, an important sector of the hospitality industry, located in the Mid-North and North Coast regions of NSW.

Resorts in the Mid-North and North Coast regions of NSW were chosen for three main reasons. First, resorts form an important part of the tourism and hospitality industry in the study area. These resorts are representative of an industry that is seen as being capable of supplying major employment growth in this region.

Second, resorts in the study area, like the hospitality industry generally, have a variety of ownership and management structures and consist of differing sized workplaces. There is a belief that employment relations processes are influenced by these characteristics (see Lafferty, 1998), therefore it is important to investigate further the influence of these characteristics.

Finally, these resorts were chosen because of their close proximity to the researchers. This proximity provided the researchers with a good understanding of the resorts and the regional economy in which they operate.

The article is structured in the following manner. Following the introduction, there is a discussion of the features of the hospitality industry, including its definition, economic significance and labour characteristics. Section 3 provides an explanation of the methodology used in the study and Section 4 provides a discussion of the findings. The last section of the article consists of a discussion of the results and conclusion.

The Hospitality Industry

There is no universally accepted definition of the hospitality industry and this makes it difficult to examine the economic impact of the industry and employment relations within it. The industry is 'difficult to define precisely because many activities commonly associated with (it) overlay with those of other industries, such as the retail and recreation industries' (Timo, 1993: 35). In Australia, the Bureau of Statistics' (ABS, 1994) definition of the hospitality industry includes registered clubs, accommodation enterprises, hotels, casinos, cafes and restaurants.

The hospitality industry often operates on a twenty-four-hours-a-day, seven-days-a-week basis. Despite the extended hours of operations, demand in the industry is volatile, with daily and seasonal fluctuations a common feature of the industry. To overcome the volatility in demand the industry employs a high percentage of casual and part-time employees, who often undertake core duties. The industry has the highest rates of casual employment of any industry in Australia (Whitehouse et al, 1997). Casual employment can contribute up to 70 per cent of the workforce in hospitality establishments (Timo, 1994). The high level of casual employment in the industry has important consequences for employee relations in terms of recruitment training, promotion, etc.

Another common and longstanding feature of the hospitality industry, due to hours of operation, is the use of penalty rates (Commonwealth Department of Tourism, and Department of Industrial Relations, 1992). Penalty rates were used to …