Extra pay chews into holiday profits for businesses

By CLAIRE TREVETT

People looking for a meal over Easter could be out of luck - many restaurants are planning to close or charge extra over the holiday break as new employment laws bite.

Easter is the first public holiday since changes to the Holidays Act requiring employers to pay staff time and a half for working on a public holiday and give them another day off in lieu came into effect.

A Restaurant Association survey found 47 per cent of its 1600 members would close.

Others were adding up to 15 per cent to their bills in an attempt to make up for the extra costs.

Judith Tabron, who runs the Soul Bar in Auckland's Viaduct Basin, said the extra cost was forcing her to close doors on Good Friday - the first time she had ever closed for a public holiday.

She would open for Easter Monday, with a 15 per cent surcharge to see if it was worthwhile, but doubted even the surcharge would cover the extra cost.

"I have spoken to others who have told me that when people make a booking and are told there will be a 15 per cent surcharge, they have cancelled it."

Chris Rupe was also considering closing his Ponsonby restaurants, SPQR and Chandelier, for the break.

Restaurant Association chief executive Neville Waldren said the large number of restaurants saying they would close could be a knee-jerk reaction.

But wages were already about one-third of a restaurant's costs and many could not justify paying the extra, which he said would add 11 per cent to existing costs.

Council of Trade Unions secretary Carol Beaumont said restaurant owners were painting the worst-case scenario.

"I find it hard to imagine people would cut off their noses to spite their faces.

"We have got a culture where going out for a meal is part of what people do for recreation. There will be people who want to go to these places and those that close will lose money as a result."

She said there would be extra costs and they could be passed on to the customer, but the workers had to be recognised.

Mr Waldren said the law changes would make New Zealand a laughing stock for tourists, who generated about 22 per cent of the industry's income.

"International tourists coming to Ponsonby Rd in Auckland, Courtney Place in Wellington or the strip in Christchurch on a public holiday will think they've stumbled into North Korea on a Monday night or gone back in time to the restaurant scene of New Zealand in the 1960s."

Restaurant owners in popular tourist spots, who usually have a profitable influx of city-dwellers on long weekends, were also debating whether to open.

The manager of Queenstown's Pog Mahones Irish bar was not shutting or imposing a surcharge.

She said staff should be compensated for working while others were playing, and dismissed arguments that the law changes made it harder to make a profit.

"We are expecting 15,000 to 20,000 extra people into town, and they get thirsty. When you've got that amount of people, if you're not making any money in this town you must be at the bottom of the lake."

Queenstown restaurateur Tony Robertson, president of the Southern Lakes branch of the Restaurant Association, said several Queenstown restaurants planned to close, especially on the Monday after many visitors had left.

Most would charge 10 or 15 per cent extra.

Holiday law

The Holidays Act comes into force today. Among its provisions:

* Workers must be paid time and a half, and get a day off in lieu, for working on a public holiday.

* Workers get a minimum of four weeks' annual leave from April 2007 - at a cost to employers estimated at $900 million by Business NZ and $350 million by the Government.

* Workers get five days' sick leave and three for bereavement.

* Up to 20 days of sick leave can be accumulated.