Wage(1) flexibility is of particular importance for the hospitality industry, since wages are usually its largest single cost item. The payment of penalty rates is another important issue facing the industry. The critics of Australia's centralised industrial relations system, such as the Business Council of Australia (BCA) (1989) and the Confederation of Australian Industry (CAI) (1990), would argue that the hospitality industry should be a major beneficiary from the decentralisation of the system that has occurred during the 1990s.
These critics have assumed that awards and the involvement of the trade union movement in wage determination have resulted in the prescription of above-market wages for individual enterprises. The critics assumed that release from these constraints, through formalised enterprise bargaining, would result in considerably improved competitiveness for Australian enterprises.
This paper, using data from a study of registered clubs in New South Wales, examines wage determination in the hospitality sector and the impact of awards, trade unions and enterprise bargaining on the process. The study found that no registered club had entered into formal enterprise bargaining. Despite the absence of formal enterprise bargaining the existence of awards and the presence of trade unions, registered clubs undertook a lot of informal bargaining and had a high degree of wage flexibility.