Festive fare pay
The hospitality and tourism industries have today come out with ‘dire’ predictions that as many as 50 percent of restaurants and cafes will probably not open over on public holidays over Christmas and New Year.
The reason? Well it seems that the price of paying workers time and a half and having to give them a day in lieu is too high.
Is this not a case of cutting off your nose to spite your face?
For many cafes and restaurants this period is one of the busiest times of the year. Holidaymakers are out and about looking for lunch and dinner and, as well, many of those who stay at home will be enjoying their holidays too much to be bothered with cooking.
In fact in December 2003, Bruce H Robertson the Chief Executive of the Hospitality Association wrote in a somewhat cynically titled article - Capturing the Spirit of Christmas, of how members could cash in on the season to make up for the quiet times.
He said:
Christmas is what hospitality is all about. It is a time when the industry shines as it accommodates the recreation needs of the nation. Prior to Christmas New Zealanders get together as workmates to celebrate the end of another year. Over Christmas and New Year, New Zealanders get together in hospitality venues to celebrate the joys of living and family, and into the start of the New Year New Zealanders relax and enjoy hospitality venues as they take a well-earned rest. It is the hospitality industry which provides the backbone of New Zealanders’ summer recreation.
What is important for the industry, other than delivering a quality product with excellent customer service, is that it is a very profitable trading period, and that profits are optimised. This is not the time of the year to be running discounts. When people are in a good frame of mind and relaxed, they are less likely to need discount inducements to make purchases. Profit margins are already tight. The Festive Season is a good time to make up for the quiet times.
But, it seems that festive cheer should not spread to staff, who give up time with their families to go to work and help their employers ‘make up for the quiet times’.
In April this year Mr Robertson called for changes to hospitality legislation, which would mean employers could negotiate their own terms for holidays.
Amendments are required to the Holidays Act to provide for the freedom of employees and employers to negotiate practical arrangements around working on public holidays. Nobody is suggesting that those who don’t want to work on a public holiday will be made to do so, but those that do should be able to negotiate their own terms. Such sensible pragmatic flexibility would suit the majority of employers and the majority of employees. Given such a change, the consumer would benefit with more premises open and the removal of the need for a surcharge.
Given that Mr Robertson suggests these changes could result in more open premises and removal of a need for a surcharge, one can only guess he is talking about employers being able to negotiate out of having to pay time and a half and/or a day in lieu.
Well, if as the Association predicts, 50 percent of cafes and restaurants shut up shop over Christmas, then I guess the other 50 percent who do open, will do an even more booming trade - and good on them.
Thankfully for me, big juicy blue bottle flies have no idea when it is a public holiday.
December 19th, 2005 at 12:16 pm
Here’s a wee thought: the provisions which hoteliers are objecting to are actually economically efficient since they help internalise the external costs of having people work on public holidays.
A sustainable business is one which can make a buck know without externalising costs onto the environment or society. Sick leave, double time etc are all mechanisms which recognise the social costs associated with paid labour.
December 19th, 2005 at 12:17 pm
“Is this not a case of cutting off your nose to spite your face?”
I doubt it.
These are business people, if they’re going to make any money from opening then they’re going to open - even if it’s going to cost them extra.
December 19th, 2005 at 12:41 pm
I think Edge you’ve confused business people with the mythical Rational Economic Unit: idealogically unconstrained and not prone to fits of picque or greed. Back on earth, we have more… emotional… organisations like the Business Roundtable…
December 19th, 2005 at 2:33 pm
It’s a bull…er…excrement prediction from some modern Scrooges. Christmas? Bah, humbug.
Since everyone has to follow the rules, no particular shop is disadvantaged, and this time of extraordinary spending will not be the time when any restaurants and cafes will be closed. They can just factor Christmas into their prices if they’re struggling.
December 19th, 2005 at 3:53 pm
yeah, I actually think the 50% considering not opening their doors is kind of a bluff … its a whinge,oh gee those god dam workers, spoiling the fun for everyone .
December 19th, 2005 at 5:01 pm
Oh dear. Not a single payroll person amongst this lot. It’s not about the equity, guys, it’s about the unclear, confusing or just plain dopily drafted legislation. Especially for shiftworkers and casuals, notions like ‘average’ anything are in practice very slippery.
If in doubt, look at the business pages, where astute business advisers are waiting to hoover up what profits are left, by offering advice on just how to calculate the trickier sums. This doesn’t happen with clear, simple stuff like GST.
As to the naive ‘everyone has to follow the rules’ schtick - keep an eye on your waiting staff these holidays and try to figure this: how old are they, and are they employees or relatives? Or, indeed, tourists themselves?
So one of the first casualties of this legislation-induced haze in these marginal situations is - who’d a thunk it? - the employment of actual working age NZ’ers.
Now there’s an externality I bet you didn’t think about, jgg.
December 19th, 2005 at 6:23 pm
frankly i don’t see anything wrong with those cafes and restaurants closing - they workers get the day off and they should still get paid for it.
December 19th, 2005 at 10:53 pm
Waymad, that’s a good solution. I can’t see anything wrong with people employing relatives and tourists. It’s better than closing the shop in the biggest spending bonanza of the entire year, it puts money in lots of people’s pockets including the workers, who will spend it, giving further people employment. Everyone wins, even people who don’t like Christmas, because they get the boxing day sales.
December 20th, 2005 at 12:17 am
having spent 2 summers working inthe hospo industry (and then swearing off ever doing that again) I can vouch for several reasons why the bosses should be taking more of the risk, and the workers seeing more of the profits:
firstly, one can seriously overdose on being a sober waitperson surrounded by drunken and unpleasant punters, esp if you’re a female waitperson; it takes serious motivation to go back again after 3 nights finishing at 3am….
secondly, having more experience doesn’t neccessarily get you a better position/hourly rate in the hospo industry, esp if you are working in random-roster type hospo/functions catering.
thirdly, I saw too many senior staff taking advantage of the youngest, least savvy of their casual workforce, who were being rostered horrific hours at really crap rates, and being told they were “lucky” to get work so regularly. (Yeah, they were being employed in place of other, more expensive-to-hire employees on the roster, if things got a bit slack)
I’m so anti this kind of thing that I’d rather my daughter busked (with her violin) than got a job at 8.50/hour for a burger-flipping joint or similar vacation nutrition vendor. ( It’s one thing that she & I do agree on, btw.)
December 20th, 2005 at 4:12 am
So let’s see what the outcome here has been. Employees who want to earn extra money are unable to, because 0% of their employers will be closed. Customers will have less places to choose from and will be busier, and small business owners will not make any money as it will have cost them more to open, that they’ll make in sales.
Yes a great victory for everyone.
December 20th, 2005 at 9:31 am
We’ll see, David “Scrooge” Farrar. Those of us who aren’t jetting around the world spending money in foreign restaurants haven’t noticed much of a drop in the availability of restaurants and cafes here.
December 20th, 2005 at 11:53 am
The big question that i dont get is why are all the businesses bitching about this and adding a surcharge in the first place?
Im sure no business owner wants to inccur additional costs but there is a lot to be said for treating your workers well and recognise what they are giving up to help your business make $$, they do tend to make you more $$ when they feel good about working for you.
Also the surcharge?! Why arent business owners simply factoring in the cost of staying open on the stat holidays into a yearly budget? I presume its how other business costs are accounted for. This would have a two fold effect, 1, customers wouldnt seek places offering no surcharge and 2, the extra costs would be absorbed over the financial year with a minimal impact on current pricing.
December 20th, 2005 at 12:14 pm
Yup, I’ve been charged public holiday surcharges in a cafe before…i scarcely noticed, I must say. Buying lunch out is a luxury anyways…
December 20th, 2005 at 1:29 pm
First, many cafes and restaurants are owner-operated. There’s a good reason they may want to close on Xmas or Boxing day which has nothing to do with profits.
Second, many cafes and restaurants are not in an appropriate place to catch the festive crowd. A cafe whose main income is the lunch crowd in the Wellington CBD, or a cafe in a mall that’s closed on Xmas day, may be closed Xmas day because they don’t get much of a crowd in rather than because of anything to do with holiday rates.
Third, it’s so nice to see that representatives of employers, and employers like DPF, are so concerned about the employee’s rights, in paticular their right to not get holiday pay. Good of them to stand up for the employees rights in this way, since the employees representatives seem so lax about working for this important right. We know it’s because the employers care so much.
December 20th, 2005 at 1:34 pm
Hmmm - I tend to agree with Fraser. The impact on total costs of holiday pay is quite small and could be built into the general margin. Equally though - paying a surcharge may help people recognise that others are giving something up so they can eat in a cafe.
And waymad - well casualisation has been around a good deal longer than the obligation to pay time and a half on holidays. In fact it really got rolling under the Employment Contracts Act (of course the drafters didn’t realise contracts was a verb). As to employing relatives, again that long predates the present requirements. OSH has been the main influence on that tradition - making casual ad hocery much less likely due to the employer liabilities.
As an aside, I think its a good thing for kids to work in their folks business sometimes, provided they aren’t exploited. Children need to see the adult world of work and its really only the last two hundred years that kids haven’t been able to see and experience their parents work.
Lots of good stuff comes from education and ending child exploitation but we also need to recognise that kids need to see what their parents do and give it a go sometimes!
December 20th, 2005 at 7:11 pm
David Farrar, I know from experience that your idea of “workers having choice” is not even close to the reality, have you ever been a hospo worker?
Also, as everyone seems to enjoy comparing us to Oz, when in Brisbane recently I noticed that surcharges were quite commonplace.
I think if public holidays are such a problem then owners need some budgeting tips
December 20th, 2005 at 9:20 pm
The main beef I have with all these extra regulations is the magical thinking it encourages in people. They actually believe that they’re getting a free lunch out of it. Costs have to be absorbed somewhere, and there’s only so much you can absorb in profits. Either you’re charging slightly more all year, or paying workers slightly less, or some combination of the above. To the average worker though, it seems like the Government is “giving them a treat”. It’s the same as the shoplifter’s fallacy.
December 21st, 2005 at 2:36 pm
Ha Ben thinks I am eating in foreign restaurants. Lunch in Canada every day is from a giant casserole pot in the office for all the campaign workers. And dinner is usually a pita sandwich/roll.
And Clara yes I have worked as a kitchen hand. And have you ever been a business owner as you think it is so easy?
December 21st, 2005 at 7:29 pm
Well I won’t answer that question because I think we have (re)established the pointlessness of ad hominems (yes I know I started it).
For the record I did not say business owning was easy, but that the proportion of total overheads that have to go to public holiday pay is quite low in the scheme of things to worry about. In fact, McD’s used their “no holiday surcharge policy” as a marketing ploy -sometimes the market does cause the right moral decision!
From my experiences in the industry, hospo workers have for years been unfairly treated in terms of holiday pay. Whether or not you believe public holiday regulations should exist in general, the old regulations undoubtedly discriminated against hospo staff and casual staff in general.
December 22nd, 2005 at 12:29 pm
umm, maybe the owners want a break too. Just like their “workers”. As an aside dont think the expression “workers” is so derogoratory and just smacks of perpetuating the myth of the so called class system?
January 8th, 2006 at 4:28 pm
Let’s see a true separation of church and state. Christmas and Easter are both based on religious…crap. There should be no laws regulating the voluntary exchange of value for value at either of these times.
Employers, employees and customers who do not believe in a mystical super being should not be punished.