Expert Steve Champion, whose specialist employee relations consulting firm ER Strategies has a number of Fast Food clients on board, is very worried that the industry will fluff the fast approaching chances to impact its industrial relations environment.
“With reviews fast approaching for both the ‘modern’ award and the Fair Work Act, QSR operators will be hamstrung by their lack of specialist industry representation”, says Champion. “Fast Food has traditionally been considered part of retail by the industrial relations institutions, even though its needs are very different in so many respects. With its own modern award, or rather the one forced on us by Fair Work Australia, Fast Food employers need to be working together to get the best result from the industrial relations system, which is failing the industry.”
He says that the industry has to rely upon competing organisations such as ARA, NRA and AIG to represent its interests. “These guys don’t even like talking to each other – how can they run an effective campaign to improve awards and the legislative environment for an industry that isn’t even their main focus?”
Champion identified the very high proportion of labour as one area where the QSR sector was different to the bulk of retail. “People demand we open at nights, on weekends and on public holidays, and yet the penalty rate regimes employers have to contend with under modern awards will crush the industry”, as the awards transition in. He gave the example of award public holiday penalties of 250% (275% for casuals), which made it impossible for any QSR business to actually make money on those days.
“If your labour is normally around 25% of sales - and I think many businesses would be much higher than that if they are paying what Fair Work says they should be – multiplying it by 2.5 on a holiday means QSR employers must be running at a significant financial loss on holidays. And state and territory governments are adding extra holidays at a whim as some sort of popularity measure. They have no idea what they are doing to business”, he says.
He identifies other costs such as laundry allowances as a ‘rort’. “What is the logic of a situation where if an employer provides a staff member with a free uniform, it then has to pay the employee to wash it? People get paid to work, so how is it the employer’s responsibility to have to get them there in a clean uniform?” He says the uniform allowance is an unintended employment benefit, the original meaning of which has become lost over time.
“Fast Food is characterised by high costs, low margins and intense competition. Every cent counts and businesses which don’t carefully manage their labour, as well as every other aspect of their business, are going to fail”. With FWA’s modern awards creating a much higher ‘level playing field’, he says the failure rate in the industry is going to increase, at the same time as adding to inflation pressures, and labour productivity is going to fall.
“Our industry has never really had a fair shot at arguing what our employment conditions should be. The one time it did was in Queensland back in the 1980s and it got working conditions that suited it. Since then, and particularly with the modern awards, we have been hijacked by unions and industrial relations tribunals trying to make us fit a model from another era, when we survived off commodity exports and manufacturing protected by tariffs, and no one opened after noon on Saturdays. The world has changed – when will the IR system and awards?”
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by QSR Media. The author was not remunerated for this article.
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