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What is fair pay for hospitality workers?

By Tanel Jan Palgi - posted Monday, 16 January 2012

Happy New Year hospitality workers! 2012 has kicked off with an attack on the Fair Work Act from hospitality entrepreneurs. In the front line is MasterChef judge George Calombaris claiming he is struggling to make ends meet due to the Fair Work Act's penalty rates.

Mr. Calombaris says waiters shouldn't be paid as much as 'it's not like they have to go to Uni for 15 years to do the job'. Surprise, surprise George - I have my Masters degree and I also work in hospitality. I'm not alone in being over qualified and under paid. The issue of hospitality workers pay rates has not received adequate public discussion so open constructive debate is a welcoming sign of progress.

Australians like to eat out. Australia's multicultural background and Italian influenced café culture has set food and coffee standards very high. We remain relatively immune to the worst impacts of the financial crisis overseas.


Australia boasts a very strong service culture in our hospitality sector comprising waiters, baristas, cooks and kitchen-hands. These people often have to work from early mornings to late at night, during public holidays and quite often have to be available on call. It's a tough gig and, despite Mr Calombaris claims, these workers remain along the lowest paid in the country.

The veritable elephant in the room is that many cafes, restaurants and bars prefer to pay their staff off-the-books. During my 4-years hospitality work experience in Melbourne I have encountered only handful of places that actually respect the law and pay legal wages. I would say the places paying legal wages are the exception rather than the norm.

George Calombaris has pointed out that not enough profit can be made while following the law and that paying penalty rates on Sundays is too heavy a burden for restaurant owners. I have worked in Melbourne for $12 per hour on Sundays. Other people I know have worked $11 per hour on weekends. Usually the hit is taken by travellers or recently arrived migrants who are more willing to be quiet about it. Is that fair? That off-the-books policy is happening here and now. Many cafes don't consider trial-shifts to be worthy of pay at all.

The Fair Work Act enacts the official minimum pay for full time waiting is $16.67 per hour (Australian national minimum wage is $15.51 per hour). Casual waiters should get paid at least $20.71 per hour. Yes, the Fair Work Act has many variables depending on whether the person working with food or alcohol or other more skilled positions such as pastry chefs.

Many busy inner city establishments prefer to hire people on a casual base as it gives them more freedom to move staff around. But paying casuals means more business-budget goes towards wages. The trade off is that full time employees must be paid also sickleave, holiday penalties etc. Why don't businesses elect to have more stable full time staff and less casuals? Many hospitality workers would love that kind of security from their employers.

Australia hasn't been hit hardly by global economic turmoil - but due to our strong dollar it is already a relatively expensive place to live. Prices are going up. Average coffee price two years ago were $3.50 but now its normal to pay $4. The increases are also evident with regard food and rent. Business owners get hit with these costs, but it is not fair to pass these costs on to workers, who have their own living expenses to cover.


The service sector has always been badly paid. In the UK being a waiter today means being at the bottom of wage scale, or worse still in the USA where tipping is considered enough of an income.

The hospitality sector is not the biggest contributor to the Australian GDP and perhaps that's why we don't hear much about it. The food, wine and coffee quality standards are high but unfortunately this doesn't always correspond to the wages for service staff. Customers know what they want. But what customers don't realise (or don't want to confront) is the low paid, off-the-books conditions to which the smiling workers are subjected.

Therefore Mr. Calombaris and colleagues - please be proud of yourself that you are following Fair Work Act. Know that there are many employers out there who just don't care about their workers at all to abide by the law. That is the real core problem in hospitality that should be targeted – then we can have a fair dinkum conversation about employers margins.

As someone who has been exploited and lived to tell the tale – take some free advice from me. Pay your staff fairly and expect genuine service from them. Customers will respond in kind with their patronage.

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About the Author

Tanel Jan Palgi is a freelance Estonian journalist, who is living in Melbourne. He has been a contributor for Estonian newspapers (Postimees, Eesti Päevaleht, Eesti Ekspress) and he has MA in humanities.

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