Fair Work Act Review Panel

17 February 2012

Fair Work Act Review Panel

Via email:

To the Fair Work Act Review Panel:

Fair Work Act Review

I am writing on behalf of the National Tourism Alliance (NTA) member associations, a number of whom have also made submissions to the Fair Work Act Review. Whilst the NTA supports those submissions, we also believe that it is important to draw attention to the cumulative impact of the Fair Work Act on the competitiveness of the Australian tourism sector.

The National Tourism Alliance (NTA) is the forum that unites Australian tourism, providing a single voice to Federal Government on issues of common interest. Our membership comprises the major associations within tourism including the Australian Tourism Export Council, AAA Tourism, Australian Federation of Travel Agents, the Victoria Tourism Industry Council, Business Events Council of Australia, Restaurant & Catering Australia, Accommodation Association of Australia, Board of Airline Representatives, Bus Industry Confederation, Australasian Casinos Association, Caravan, RV & Accommodation Industry of Australia, Tourism & Transport Forum, Tourism Accommodation Australia, Winemakers’ Federation of Australia, the Australian Regional Tourism Network, as well as all of the state Tourism Industry Councils.

Tourism contributes over $34 billion to Australia’s GDP and employs over 500,000 Australians. Tourism is Australia’s largest services export industry, providing 9.0 per cent or $22.8 billion of Australia’s total exports in 2009-10. Australia is also a significant beneficiary of global tourism spending, ranking 8th globally and receiving 3.3 per cent of global tourism receipts.[i]

Tourism also has significant flow-on effects to other areas of the Australian economy.[ii] For every additional dollar of value added generated by activity in tourism, a total of $1.91 of value added is created, ahead of other industries such as mining, retail trade and education and training.

As a sector which serves visitors and travellers, both Australian and international, tourism is by its very nature a highly labour intensive 24/7 service industry. Australia’s tourism sector needs to be able to achieve productivity improvements through flexibility in the workplace, to ensure that it remains competitive in a highly dynamic international trading environment, and particularly at the moment in the context of the high value of the Australian dollar. In the context of maintaining international competitiveness, it is imperative for Australian tourism that the national workplace relations regime promotes flexibility and workplace level bargaining to ensure the best outcomes for businesses and to promote increased employment for workers in the sector.

The NTA has concerns regarding the current operation of the Fair Work Act in a number of areas, particularly the lack of appropriate recognition of small and medium enterprises, and the lack of focus on productivity, particularly in regards to Modern Awards and Individual Flexibility Agreements.

As a result of these deficiencies, it is the view of the NTA that the operation of certain provisions results in the risk that the Fair Work Act is not fulfilling a number of its objects in relation to the tourism sector, in particular the objects to “promote productivity and economic growth for Australia’s future economic prosperity”, “achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action” and “acknowledging the special circumstances of small and medium-sized businesses.”

Over 93 per cent of businesses within the sector are small and medium enterprises. More than 100,000 Australians own tourism businesses. As a sector in which the overwhelming majority of businesses are labour-intensive small businesses, often managed by owner-operators, the impact of the definition of size is significant.

By counting part-time and casual staff as the equivalent of full-time permanent staff, the definition of “small business” in the Act is misleading and fails to include in that definition many small tourism enterprises with less capacity than larger businesses to meet other obligations that are imposed on those larger businesses.

In particular, this definition potentially captures small tourism enterprises in an unfair dismissals regime in which they do not have the capacity to respond effectively to potentially vexatious claims. We support the proposition that a broader definition of small business employer should be established, and in particular should be defined as an employer employing fewer than 25 equivalent full time (EFT) staff.

It is also the view of the NTA that provisions in the Fair Work Act relating to enterprise agreements and individual flexibility agreements do not provide adequate flexibility. In particular, the replacement of the previous no-disadvantage test with a Better Off Overall test has resulted in reduced flexibility at the enterprise level in a highly heterogeneous industry. This loss of flexibility limits the capacity of businesses to trade and to meet the needs of tourism consumers and can result in a loss of tourism appeal at a destination level, leading to a negative flow on effect to other businesses in the tourism supply chain.

In summary, the current provisions of the Fair Work Act and Modern Awards impose artificial constraints on tourism businesses. These constraints limit their ability to provide services to customers in the 24/7 business environment as it limits their ability to hire and pay employees. In addition, the onerous administrative and compliance burden of the Fair Work Act is a further constraint on small and medium businesses particularly, affecting their productivity and profitability, and thereby their ability to grow and employ more people.

NTA members appreciate the opportunity to provide feedback in relation to this important review. If you have any questions in relation to our letter please do not hesitate to contact me on (02) 9264 2185.

Yours sincerely

Juliana Payne

Chief Executive Officer

National Tourism Alliance / Phone 02 9264 2185
ABN 82 539 547 489 / Fax 02 9264 1085
Level 3, 309 Pitt Street /
Sydney NSW 2000 /
NTA Member Associations as at 10 October 2018
AAA Tourism
Accommodation Association of Australia
Australasian Casino Association
Australian Federation of Travel Agents
Australian Regional Tourism Network
Australian Tourism Export Council
Board of Airline Representatives of Australia Inc.
Bus Industry Confederation
Business Events Council of Australia
Caravan, RV & Accommodation Industry of Australia
Queensland Tourism Industry Council
Restaurant & Catering Australia
South Australian Tourism Industry Council
Tourism Accommodation Australia (AHA)
Tourism & Transport Forum
Tourism Council ACT and Region
Tourism Council Western Australia
Tourism Industry Council NSW
Tourism Industry Council Tasmania
Victoria Tourism Industry Council
Winemakers' Federation of Australia
National Tourism Alliance / Phone 02 9264 2185
ABN 82 539 547 489 / Fax 02 9264 1085
Level 3, 309 Pitt Street /
Sydney NSW 2000 /

[i]Tourism Satellite Account (cat. No. 5249.0), Australian Bureau of Statistics

[ii]State of the Industry Report 2011, Tourism Research Australia