Hundreds of thousands of hospitality workers may be in line for a pay boost since the Government approved an application for unions to bargain with employers.
But the timing of the announcement, which has been touted by one union as an opportunity to “deliver some significant improvements for low-paid workers”, is being scorned as “not ideal” by the Restaurant Association.
The Ministry of Business, Innovation and Employment (MBIE) approved the Unite union’s application to begin bargaining for a Fair Pay Agreement on Monday evening.
Unite national secretary John Crocker said any agreement would be complicated because it would cover a wide range of businesses and occupations.
Crocker said the fact it was the first application for a Fair Pay Agreement added to any challenge.
“But we are very excited that we can now get on with the job and deliver some significant improvements for low-paid workers who really need help,” Crocker said.
“This Fair Pay Agreement will also help the industry out of its staffing crisis,” he claimed.
“Employers who see the need and are willing to improve pay and conditions to attract and keep good employees won’t be undercut by those wanting to continue the minimum wage, minimum hours and high turnover practices that contribute so much to the current shortages of staff.”
Restaurant Association chief executive Marisa Bidois said the hospitality industry was ready to discuss terms and conditions in good faith, and she recognised employees were wanting to work for businesses that paid well.
“The association has always supported fair pay and appropriate working conditions and has long done so without the compulsive force of the law,” Bidois said.
“In this current climate, we are seeing more businesses thinking about what they can do to attract and retain staff.”
But Bidois said the timing for bargaining was “not ideal for an industry already experiencing multiple challenges”.
Recent surveys canvassing the biggest issues for the industry revealed increasing costs was the highest rated, she said, adding that business confidence had slumped.
“The increasing compliance burden continues to take its toll on many of our employer members,” Bidois said.
“The vast majority [of members] have seen a drop in business confidence – a contributing factor has been policy uncertainty and the legislative changes they have faced over the past three years.”
She said profit margins in the industry were low, claiming they averaged 4 to 7 per cent.
“There isn’t a lot of wiggle room there,” she said.
“Inflation is already heavily impacting input costs. This already puts margins under pressure. Our sector has been under enormous pressure over the last three years.”