Unmasking Re-Regulation in the Luxury Hotel Sector

Article excerpt


The pursuit of regulatory reform in order to enhance organisational flexibility and efficiency appears to be ongoing in Australia. This is particularly salient in the service sector, where competition is strong and operating hours are often extended. In responding to these issues, government has sought to provide both employers and employees with additional regulatory options to better suit their individual needs; thereby offering what might be termed 'regulatory choice'. While employers, on average, have engaged in these alternate forms of agreement making, those within the hospitality industry have been less enthusiastic about bargaining outside of the award system. The reasons for their reluctance have not been examined in depth, however. This paper therefore seeks to analyse the factors underpinning employers' bargaining decisions in order to develop a greater understanding of regulatory choice in Australian service sector firms. In doing so, the analysis focuses on employers' bargaining arrangements in the Australian luxury hotel sector. The findings indicate that regulatory choice is influenced by four primary factors: business/human resource management strategy; workplace characteristics; finances and perceived risk; and administrative issues. Contrary to the government's endeavours to enhance flexibility, some employers 'choice' of employment regulation was restricted. Regulatory choice appears to be significantly more complex than anticipated.

Keywords: regulation; hotel industry; bargaining

Employment regulation in Australia underwent a series of changes throughout the 1990s, marked by the introduction of enterprise- and individual-level bargaining along with award simplification. This process of reform has accelerated once more with the Howard government's Workplace Relations Amendment (WorkChoices) Act 2005 (WorkChoices Act). At the heart of all of the reforms implemented over the past decade and a half lies the notion of and desire to enhance flexibility for employers and employees through the introduction of alternate forms of agreement making. It is argued that the flexibility to tailor employment conditions and workplace practices to fulfil the requirements of individual firms and employees will offer benefits for both parties, and the economy as a whole (Australian Government 2005; Commerce Queensland 2005; Industry Commission 1996). The introduction of alternate forms of employment regulation has led to the development of what might be termed 'regulatory choice'.

During the 1990s, the Labor federal government sought to enhance competitiveness by introducing legislative amendments designed to encourage and promote greater workplace flexibility. In order to encourage agreement making outside of (but not necessarily to the exclusion of ) the award framework, enterprise-level bargaining was promoted through the introduction of certified enterprise bargaining agreements (EBAs) in 1991 (eg. Buchanan et al. 1999; Keating 1992; Keating 1994). Subsequently, the incoming Coalition federal government (elected to office in 1996) instigated further changes with the writing of the Workplace Relations Act 1996. EBAs were promoted as the formal employment relations system whilst awards were meant to form a less encompassing role in the labour market, becoming instruments for protecting the rights of the industrially weak, and particularly the low paid. As part of the agenda, the award simplification process commenced. The Workplace Relations Act 1996 confined awards to 20 'Allowable Matters', and matters 'incidental and necessary' to those 20 matters. The option of forming individual agreements between an employee and employer, Australian Workplace Agreements (AWAs), was also contained in the Workplace Relations Act 1996. The WorkChoices Act will further rationalise awards and continue to promote agreement making outside of the award system (Alexander 2006; Macken 2006).

Within this context of increased regulatory choice, award coverage has declined since the early 1990s while the formation of EBAs (or certified agreements) and AWAs has increased steadily across Australian workplaces. …