Hospitality work: A map for change

David Williamson, Candice Harris and Erling Rasmussen

Almost three years after COVID-19 hit New Zealand, the hospitality sector is slowly rebuilding. Widespread business closures, limited opening hours and an inability to attract workers have drawn widespread media attention and renewed calls for increasing the number of migrant workers allowed into New Zealand to fill vacant jobs.

The government has also set out its goals for regenerative tourism (encouraging visitors to leave a destination better than when they arrived) and hospitality (fostering a sustainable and attractive industry that raises the reputation of the sector). It has also opened debates about a “reset” of immigration policy.

Our survey of 400 hospitality workers, taken immediately before the pandemic struck, had already showed concerning levels of non-compliance with basic employment rights within the industry. The survey results point to long-standing issues in the sector.

Our report has also informed the Ministry for Business, Innovation and Employment’s Draft Tourism Transformation Plan, which has just been released for consultation. Hopefully, by correctly understanding the true origins and nature of the problems, the hospitality industry can identify lasting solutions.

Reputational damage

Key findings from the survey included:

• 16% of respondents have not signed an employment agreement before starting work
• 13% of respondents are not receiving the correct payslips
• 18% of respondents are not receiving the minimum wage
• 22% of respondents did not get the correct holiday pay
• 22% of respondents are not getting time off or correct pay for working statutory holidays
• 22% of respondents are not receiving the correct rest breaks
• 81% of respondents state they received no training in their jobs
• 49% of respondents experienced or witnessed harassment in the workplace
• 69% of respondents were aware of health and safety risks in their workplace.

These findings describe a sector with a significant number of employers who are not meeting common expectations for decent work. This minority is dragging down the overall image of the industry and undermining the many good hospitality employers.

One hospitality worker said:

I haven’t had a pay rise in the four years I have been with my current employer.

According to another:

I didn’t get my minimum wage. I didn’t get my holiday pay, and because of my migrant status I was too afraid to protect myself legally.

A third said:

The longer you work in the industry the more you see and are subjected to all forms of abuse. Some people (customers and employers) see hospitality staff not much more then a slave to service their needs".

Failures are not new

The first message from the survey is that while current issues in the sector are acute, they are not new. COVID has simply amplified long-standing problems.

Crucially, it is important to draw a distinction between issues around migrant labour and the low pay and poor conditions that the survey highlights.

The New Zealand hospitality sector has always struggled to find local workers. As a result it has been highly dependent on migrant labour. But the poor pay and conditions so clearly exposed by the survey were not common before the 1980s.

This raises the question – what changed?

Prior to the 1980s, hospitality pay and conditions were contained within industry-wide collective agreements, enforced by a powerful union that benefited from strong relationships with the state and employers.

While one couldn’t argue that exploitation never occurred during this period, the system provided both migrant and local hospitality workers with concrete minimum pay rates, extensive penalty rates and protected conditions.

However, the free market revolution of the 1980s and 1990s strongly encouraged individual contracting and removed compulsory unionism. Hospitality workers were now exposed to downward pressure on wages and conditions, without the protection of a powerful union or collective agreements.

From this point on, increasing casualisation (part-time or on-call work, rather than full-time employment), falling wages and increasing numbers of exploitation cases have come to define the sector.

A map for change

So what needs to change to improve the sector?

Firstly, the government needs to increase pressure on poor employers and reward the good employers. By increasing the resources of the Labour Inspectorate, a more rigorous enforcement of labour laws can be brought to bear on employers who are not meeting the standards of decent work.

At the same time, customers can be engaged though initiatives like the New Zealand Restaurant Association’s Hosopocred scheme. This scheme, which will require an employer to apply and provide evidence for accreditation, will help identify good employers and allow customers to make a choice to support them. Consumer behaviour can be a powerful incentive for improving employment practices.

Secondly, there needs to be widespread support for the government’s proposed fair pay agreements. These could be the basis for industry-wide commitment to decent work, including better pay and conditions, improved training and better representation of employees voices.

Fair pay agreements could result in significant changes in the workplace, including lifting service quality and employment standards.

Finally, those involved in the hospitality sector must continue and strengthen the tripartite approach between unions, employer groups and the government that is driving the proposed industry transformation plan set out by the government. Only when all elements of the industry work together can the image and reality of hospitality work be fundamentally changed.

Useful links:

Study hospitality, tourism and events at AUT

Voices from hospitality's front line

New Zealand Work Research Institute