Hospitality Industry (General) Award Summary 2020

In this document, we detail some of the key provisions in the Hospitality Industry (General) Award 2020 including what sorts of businesses it covers, the different levels of employee classification under the Award and guidance on employee entitlements.

The Award contains a number of provisions that are uncommon in the modern award system including the concept of part-time employees having “guaranteed hours” and “availability periods”; an entitlement (in some circumstances) to pay for public holidays even where the employee was not rostered to work, and an obligation (in some circumstances) to pay annual salaries at 25% above the minimum weekly wages set out in the Award.

If you require any assistance in understanding your rights or obligations under the Award, please contact us.

Table of Contents

Coverage of the Hospitality Industry (General) Award

The Award covers employers and employees working in the “hospitality industry”, the Award states this includes:

• All types of tourist or residential accommodation including hotels, motels, serviced apartments, resorts and caravan parks;
• Bars and pubs;
• Caterers;
• Casinos;
• Nightclubs, function areas, convention facilities and restaurants that are connected with an employer covered by the Hospitality Award (e.g. a restaurant or a nightclub at a hotel).

The Award does not generally cover:

• Clubs registered or recognised under State or Territory legislation;
• Businesses covered by the Fast Food Industry Award 2010, the Registered and Licensed Clubs Award 2010, or the Restaurant Industry Award 2020;
• Boarding schools, residential colleges, hospitals, orphanages, councils or local government bodies, catering by a restaurant business or aged care facility, theme parks, in-flight catering businesses or roadhouses that sell petrol;
• Contract security, gardening or maintenance provided by a business that isn’t primarily in the hospitality industry.

Classifications

The Award sets out a classification structure that defines the tasks that employees perform at different skill levels in Schedule A – Classification Definitions. Each classification has a corresponding minimum rate of pay.

Examples of employees covered by the Hospitality Award:

• Food, beverage and gaming attendants (including bar staff and waiters);
• Chefs including apprentice chefs;
• Cooks and kitchenhands;
• Customer and guest services;
• Concierge or doorpersons;
• Administration employees;
• General maintenance; or
• Employees performing any other duty set out in Schedule A – Classification Definitions.

The Award only covers certain levels of managerial staff. For example, there is a classification under the Award for “hotel managers”, but specific exclusions for “senior managers” who are responsible for a significant area of the business, including company secretaries, chief accountants, human resource managers, venue managers, etc.

You can read more on the EI Legal blog about the difference between hotel managers and senior manager’s.

Rates of Pay

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Types of Employment

Full-time:

An employee who is engaged to work an average of 38 ordinary hours per week. See clause 15.1 for rostering patterns. Employees can be paid per hour or paid a salaried amount (see “Annualised Salaries” below).

Part-time:

A part-time employee works at least 8 and less than 38 ordinary hours per week (or over the roster cycle) and has reasonably predictable hours of work. The minimum engagement is 3 hours per day.

Part-time employees must have a written agreement that includes the number of hours the employee is guaranteed to be given each week or roster cycle, and the employee’s availability periods including days and times.

For example, a part-time employee might have 10 guaranteed hours per week. Their availability might be Mondays, Tuesdays and Wednesdays between 7 am and 7 pm. This means they must be rostered for at least 10 hours per week during these periods. They can generally be rostered for additional hours within these periods without the need to pay overtime (see further below).

Changes to the guaranteed hours can only be made by written agreement with the employee. The employee can change their availability only where there is a genuine and ongoing change in their personal circumstances, by providing 14 days’ written notice.

Employment Innovations has developed template employment contracts, especially for the hospitality industry. They include clauses that specify annualised salary arrangements in compliance with the requirements of the Award. Contact us to find out more.

Casual:

A casual employee doesn’t have guaranteed hours of work and usually works an irregular pattern. They are paid an additional 25% loading on top of the permanent base rate of pay as compensation for annual leave and personal/carer’s leave entitlements, notice of termination, redundancy benefits and other entitlements of full or part-time employees.

A casual employee must be engaged for a minimum of 2 hours of work. A casual employee must be paid at the termination of each engagement but may agree to be paid weekly or fortnightly.

Casual Conversion

Casual employees are entitled to ask their employer to convert their employment to full-time or part-time employment when they have worked a regular pattern of hours over a period of at least 12 months and they could continue to work those hours as a full-time or part-time employee without significant changes.

The Employer must provide a copy of the casual conversion subclause to all casual employees within their first 12 months of employment. It is generally easiest to provide this to employees when they start their employment. Any request to convert must be considered by the Employer, but may be refused on reasonable business grounds.

Please contact Employment Innovations if you need a copy of the clause to send to your employees.

Annualised Salary Arrangements

Instead of paying full-time and part-time employees according to each hour they work, an employee (other than managerial staff in a hotel) can agree with their employer that they will be paid an annual salary on the following basis:

• Annual salaries must be paid at a rate equivalent to at least 25% or more above the minimum weekly rate set out in the award, multiplied by 52 weeks;
• The 25% loading is designed to compensate for overtime, penalty rates and any other monetary award entitlement – so employers are not required to pay these (subject to what is said below!);
• The employer and employee must agree in writing (i.e. through a contract of employment) which monetary entitlements in the award are covered by the salary;
• The employer must perform an annual reconciliation of the salary the employee was paid against what the employee would have been entitled to if they had been paid hourly under the Award, including all overtime and penalty rate payment obligations based on the actual work pattern;
• In order to do this the employer must keep all records relating to starting and finishing times of employees under an annualised salary arrangement, which must be signed weekly by the employee;
• Where the comparison shows a shortfall in the employee’s wages, the employee must be paid the difference between the wages earned under the Award and the actual amount paid.

There are similar provisions dealing with annual salaries to be paid to managerial staff in hotels, except that there is no requirement to perform an annual reconciliation for these employees, refer to clause 25 of the Award.

Employment Innovations has developed template employment contracts, especially for the hospitality industry. They include clauses that specify annualised salary arrangements in compliance with the requirements of the Award. Contact us to find out more.

Loaded Rates of Pay

Employers can choose to pay a loaded rate to a full-time adult employee who is classified as a Level 3 or above. This loaded rate is set to absorb certain award entitlements such as overtime rates, penalty rates (except public holidays rates) and the split shift allowance.

These provisions do not apply to employees:

(a) engaged in accordance with clause 15.3 of the Hospitality Award (“catering in remote locations”);
(b) rostered in accordance with clause 15.1(b)(vii) of the Hospitality Award (i.e. those rostered for160 hours over a 4 week period with a minimum of 8 days off each 4 week period plus an accrued day off).

If the business wishes to engage an employee under these terms they will need to provide the worker with a copy of the arrangement in writing. A template for this arrangement can be found within Schedule L of the award.

The form needs to include the:

• names of the employer and employee;
• the employee’s classification or wage level;
• loaded rate range of days;
• loaded rate maximum weekly hours;
• loaded rate percentage;
• ordinary hourly rate;
• loaded rate (ordinary hourly rate x loaded rates percentage).

Paying a loaded rate under the new provisions is only possible where all the following points are satisfied:

(a) the roster cycle must operate weekly commencing on a Monday;
(b) on Monday to Friday: a maximum of 11.5 hours can be worked (excluding meal breaks) per day/shift rostered between 7:00 am and 12:00 am (midnight);
(c) on Saturday: a maximum of 10 hours can be worked (excluding meal breaks);
(d) on Sunday: a maximum of 10 hours can be worked (excluding meal breaks); and
(e) if the period between shifts is 3 hours or less, a split shift allowance must be paid.

When paying a loaded rate under the award’s conditions, the business will also need to adhere to certain record-keeping requirements. Employers must keep a record of the starting and finishing times of all work performed under a loaded rate, and any unpaid breaks are taken. This record must be signed by the employee or acknowledged as correct in writing (which may by electronic means) by the employee, each pay period or roster cycle.

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When overtime applies

Full-time and part-time employees:

Overtime rates are payable when a permanent full or part-time employee works:

• Outside of their rostered hours;
• More than an average of 38 hours per week over the roster cycle (maximum 4 weeks);
• Over 11.5 hours in any one day, exclusive of unpaid meal break times;
• More than 3 x 10-hour days in a row without a 48 hour break immediately afterwards;
• More than 8 days of 10 hours in a 4-week roster;
• A broken shift that spans over more than 12 hours in one day or shift.

For part-time employees, additional hours can be rostered at ordinary rates provided they are not in excess of the above criteria and are rostered within the employee’s specified availability periods.

Casual employees:

Overtime rates are payable when a casual employee works:

• More than 38 hours per week over the roster cycle (maximum 4 weeks);
• More than 12 hours in any one day or shift.

Overtime Rates

The overtime rate payable depends on the time at which the overtime is worked:

• Monday to Friday: 150% of their ordinary hourly rate for the first two hours then 200% for the rest of the overtime;
• Between midnight Friday and midnight Sunday: 200% of their ordinary hourly rate.

Note: All employees receive overtime rates calculated on the permanent employee’s base rate of pay i.e. casual employees do not receive a casual loading on top of overtime rates of pay.

Time in lieu

An employer and employee may agree in writing to an employee taking time off instead of being paid for a particular amount of overtime work. The period of time off that an employee is entitled to take is equivalent to the amount of overtime hours worked.

For example; an employee who worked 2 overtime hours at time and a half is entitled to 2 hours’ time off.

Penalty Rates

When an employee works ordinary hours on the following days, they are entitled to the following penalty rates:

Additional penalty payments apply in the following circumstances:

• Evenings 7 pm to midnight Monday to Friday only: $2.27 per hour or part hour worked;
• Early mornings midnight to 7 am Monday to Friday only: $3.41 per hour or part hour worked;
• Split shift allowance: See allowances section below.

Public Holidays

• Full and part-time employees may by agreement with the employer receive a 125% penalty and a day in lieu instead of the 225% penalty rate;
• An employee being paid an annualised salary that is required to work on a public holiday will be entitled to paid time off that is of equal length to the time worked, or the equal length of time worked added to their annual leave entitlement, in addition to receiving their normal salary;
• Permanent employees that are not required to work on a public holiday (due to venue closure or annual leave) will receive their ordinary rate of pay for the day of work, and no deduction from their leave balance. If a part-time employee would not normally work on the day of the week that a public holiday falls, they will not be entitled to payment;
• Full-time employees (hourly and salaried) whose rostered day off* falls on a public holiday must:
  (a) be paid an extra day’s pay;
  (b) be provided with an alternative day off within 28 days; or
  (c) receive an additional day’s annual leave.
• Part-time employees are entitled to payment for public holidays fall on days on which hours (including additional hours) of work are rostered.

Note: A rostered day off means any day the employee is not rostered to work (i.e. it does not mean a day off as part of an “RDO system”).

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Breaks

Breaks apply to all employees. Unpaid meal breaks should be taken no earlier than 2 hours and no later than 6 hours after starting work. Breaks should be spread evenly across a shift.

Note: For a shift of more than 6 hours, if no break is given the employee shall be paid an additional 50% of the ordinary hourly rate extra per hour (or part hour) until either a break is given, or the shift ends.

Leave & Annual Leave Loading

Employees are entitled to leave in accordance with the National Employment Standards (NES) set out in the Fair Work Act 2009. For full-time and part-time employees, this includes four weeks annual leave per year and 10 days personal/carer’s leave.

Employees are entitled to an annual leave loading (i.e. an uplift in the wages they would have earned) of 17.5% when they take a period of annual leave.

Notice Periods

The notice periods to be given by an employer is in accordance with the NES. The Award requires employees to provide the same amount of notice as the employer, except employees are not required to give the additional weeks’ notice where an employee is 45 years or older and has worked for at least 2 years.

A deduction can be made for inadequate notice (see below).

Deductions From Wages

• Breakages and cashiering underings: no deduction can be made unless in the case of wilful misconduct;
• Employee accommodation and meals provided during work hours: deductions are allowed in accordance with clause 37 of the Award;
• Inadequate notice: if an employee does not give the amount of notice required by the Award to the employer, a deduction can be made from unpaid wages of up to one week. This is provided that the employee is aged 18 years or older and a deduction is not unreasonable in the circumstances. No deduction can be made from accrued annual leave.

Higher Duties

An employee engaged for two or more hours of one day for duties carrying a higher rate than their ordinary classification must be paid the higher rate for such a day (the entire shift). If for less than a two hour period, the employee must be paid the higher rate for the time worked. This clause excludes food and beverage attendants grade 2 and 3.

Allowances

These are some of the commonly used allowances under the Award, which are outlined below. Refer to clause 26 of the Award for a list of all allowances and the full conditions associated with each allowance.

Note: Please note that allowances are regularly updated. Please refer to the Fair Work Ombudsman pay guide for the current rates.

Superannuation

There is no longer a minimum earnings threshold for superannuation contributions. The one exception is that no super is payable to employees who are under 18 and work for an employer less than 30 hours per week.

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How Employment Innovations can help

If you require assistance with dealing with disciplinary issues concerning staff, Employment Innovations can help. Our HR Advisors will be able to guide you through each step of the disciplinary process and we have template documents (e.g. direction to attend a disciplinary meeting, written warning, letter of termination, etc) available as part of our subscription packages.

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Employment Innovations Modern Awards Knowledge Base

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About Employment Innovations

Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.

Disclaimer

The information provided in these knowledge base articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.

This knowledge base article will change over time, as Modern Award legislation relating to this Industry or Occupation is passed by the Fair Work Commission. Originally published on 23 September 2019 and last updated on 12 April 2022.

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