Restaurant News

Border closures aren’t the only cause of hospitality’s labour crisis, and international students aren’t the only solution

The industry talent pool was running dry long before the pandemic, and it’ll take a change in government policy, and self-reflection from restaurants, to make hospitality great again.

By Yvonne C Lam
The dining room at Nomad Up the Road, where Sydney restaurant Nomad temporarily relocated in 2019. Photo: Petrina Tinslay
Peppe's is just one example of how deep the labour crisis in hospitality runs. One fateful day in April, two of the three chefs couldn't make their shifts forcing the vegan pasta eatery in Sydney's Bondi to close for the night.
"Normally it's not a big issue. These guys have friends or know people in the industry who can fill in," says co-owner Grace Watson.
But normality is a slippery concept in 2021, and more than a year on from the nationwide lockdown that shuttered restaurants from coast to coast the hospitality industry is facing another crisis: a dearth of workers.
In backpacker-heavy Bondi, Watson says she used to be flooded with resumes on a daily basis, and once made the mistake of putting her personal phone number on a Peppe's job advertisement. "My phone wouldn't stop ringing." Recently she advertised for a full-time chef, offering a salary of up to $100,000, well above the industry standard. She received just three replies, and all were underqualified for the job.
Existing restaurants are busier than ever, and new ones are opening at a cracking pace, but there are simply not enough bodies and minds to run them. At Mister Bianco in Melbourne, owner Joe Vargetto decided to close the restaurant for a night to give overworked staff a much-needed break.
In the regions it's a catch-22; destination restaurants such as Liberté in WA's Albany and The Provenance in Victoria's Beechworth are receiving an influx of interstate diners but have been forced to cut down their trading days. "It's working at the moment because it's really busy, but if we had any downturn in trade it'll be tricky," says Michael Ryan, chef and co-owner of The Provenance.
The sector has historically relied on migrant workers, backpackers and international students to fill vacancies in front-of-house and kitchen roles. Industry figures have pointed to international border closures, in place from March 2020, as the predominant cause of the current worker shortage – international workers have flown the coop, or they can't get back into the country.
In pre-pandemic times at Sydney's Nomad, the kitchen was predominantly staffed by international workers. "There were times where in a team of 25 to 30 chefs there might be just five Australian workers. [Migrants] are the backbone of the industry," says executive chef Jacqui Challinor.
Nomad executive chef Jacqui Challinor. Photo: Supplied
But if visa workers were critical to the industry, government policy has been unkind to them. With one hand, the Morrison government in 2020 barred tax-paying migrant workers and international students from accessing JobKeeper and welfare support. With the other hand it beckoned them back to the workforce in 2021, temporarily removing the 40-hour fortnightly cap on working hours for international students already in the country so they can work harder, better, faster, stronger in hospitality and tourism. Migrant bodies and their livelihoods, seemingly, are dispensable until they're not for the sake of nation-building and economic recovery.
Rosi Aryal Lees, a PhD candidate in anthropology at Monash University, has conducted preliminary research on the impact of COVID-19 on the Nepalese expat community, who represent the fastest-growing migrant group in Australia. Hospitality is the second-largest employer of Nepali visa holders, and she says many students were frustrated at being excluded from the JobKeeper scheme.
"They note that they pay taxes – even those who work cash in hand do at least 20 hours 'on the books' – plus high visa and education fees, meaning they make an important contribution to the Australian economy across multiple essential sectors, including higher education, hospitality, food production and healthcare," she says via email. "Australian residents and citizens who have or had access to JobKeeper and JobSeeker have indeed relied on temporary migrants working in these sectors during the pandemic, in terms of keeping the economy going."
So will the removal of the 40-hour cap save the industry? Myopically, it could alleviate the immediate labour stress on restaurants while providing a boost to the incomes of international students. Some students say the 40-hour restriction was not financially viable, and because they're reluctant or unable to ask for family support back home they're forced to take precarious cash-in-hand jobs to make ends meet.
But associate professor Chris F Wright from the University of Sydney Business School says scrapping the cap will only expose already vulnerable workers to bad-faith employers. Removing fortnightly restrictions is one thing; putting in place infrastructure where workers are supported and current workplace rules are enforced is another. "The government has not done anything to address the significant problem of wage theft amongst temporary visa workers," he says.
A 2017 study by researchers Bassina Farbenblum and Laurie Berg – considered to be the most comprehensive study of wage theft and working conditions amongst visa holders in Australia – found 77 per cent of workers in the food services industry were paid below the minimum wage. Three years later, the researchers found international students continued to experience egregious underpayment and warned: "In the absence of effective interventions, this situation will likely worsen when international students return to work as COVID-19 restrictions ease, with serious consequences for these workers and the labour market more broadly."
The removal of working-hour caps is why Wright and his colleague Dr Stephen Clibborn have described international students as "sacrificial lambs" offered up to exploitative workplaces.
"[Removing the cap] would be a decision I would be more inclined to support if the government had done more to address the absolute scandal of people not receiving their legal entitlements to the minimum wage," says Wright. "I understand students need to support themselves, and addressing wage theft and enforcing the law will actually help to address that because it means people will receive more money."
Furthermore, he says the original and primary intention of the student visa scheme was for study and cultural exchange; work was secondary and incidental. A federal inquiry into migrant worker exploitation, which handed down its report in 2020, considered lifting the 40-hour cap, but ultimately decided against the recommendation after finding that students who worked more than 40 hours a fortnight were more likely to fail their study.
Altruistic or paternalistic? It's sticky to navigate in the quagmire that is capital, market forces and worker autonomy. Nepali student Saurav Shrestha, who works as a bartender at Sydney's Glenmore Hotel, says extra work won't have an adverse impact on his studies. "I'm good at managing my time. I do my assignments on time, study for exams. I think it's okay."
Devi Chatari agrees. "20 hours a week is not enough for a student," she says. The 24-year-old from Indonesia's West Kalimantan works as a cook at Sydney's Ho Jiak Haymarket while studying human resources, and welcomes the changes. "I live in the city and rent is really high compared to the suburbs. And then I'm paying [study] fees and for food on my days off."
Joff Hernandez, a chef and masters student from the Philippines, sees both sides of the coin. "It can be good because students will have more opportunity to make money, but at the same time I feel they could be asked to do so much more [work] than they're asked for," he says. "I feel like the priority of students is to finish their course."
In between working as a commis chef at Melbourne's Smith & Daughters and running Lutong Lupa, his own private vegan Filipino dinner business, Hernandez juggles studies in hotel management and is well-versed in the industry's chequered legacy of underpayment. "I've done lots of research on wage theft and on international students having to carry that burden [...] Definitely, students can be taken advantage of, and that's the negative side of having unlimited working hours."
In the NSW Northern Rivers region, international students say the labour vacuum has put them in an unlikely position of power, where the worker shortage is used as a bargaining chip for proper wages. "I have an impression that especially here in Byron Bay, it used to be so hard to get a job as a cook or front-of house so underpayment was normal," says one student. "Now it's so hard for businesses to find workers, so many places seem to offer a fair pay rate."
But it's a sorry state of affairs when students regard their legal pay entitlements and the claiming of their bare minimum rights as cause for celebration. It doesn't feel like power but rather, a socio-economic hazing where migrants are made to feel thankful they're not treated worse.
In between her coursework, 24-year-old international student Devi Chatari works as a cook at Ho Jiak Haymarket in Sydney. Photo: Junda Khoo
There's another more necessary acknowledgement to the industry-wide worker shortage: the labour crisis was well underway before the pandemic, spurred by stagnant wages, poor working conditions, and a lack of quality training to feed the hospitality talent pool in Australia.
Restaurant owners point to the gradual whittling away of TAFE education by Labour and Liberal governments over the years, and the cutting of chef apprenticeships from four years to three has diminished the quality of applicants in the sector.
Then, there's the alarming statistics about enrolment and course-completion rates. "In 2010, the number of food trade workers in apprenticeships and traineeships was 19,200, and by 2018 that declined to 12,000," says Wright. "And those who actually completed those courses have declined by almost half, from 6,300 in 2014 to 3,200 in 2018."
Border closures are not exclusively to blame for the restaurant industry's current woes, and student visa workers are not the only solution. The current labour crisis, dire as it is, is an opportunity for operators to reflect on what they can do today to make the industry more sustainable and attractive to workers.
"It's been a really unattractive industry to join, with notoriously really bad pay, long hours and an unhealthy association with the party lifestyle. It's a world unto itself," says Challinor.
"We've had to pay up to $70,000 to sponsor high-level staff in roles that we simply could not fill with local staff as they do not exist," says Nomad co-owner Rebecca Yazbek. "The idea that 'foreigners are coming and taking Australian jobs from Australians' is alive and well. The problem is that the industry as a whole is not respected as a career."
Nomad is planning to open its first restaurant In Melbourne, and is on a recruitment drive to hire some 60 staff in time for its August opening. In order to trade seven days a week, Challinor needs to find 25 chefs for the kitchen. She could do with fewer staff, if she so desired, but she has an agenda of offering 40-hour-a-week contracts for full-time chefs, and eliminating double shifts, the practice of rostering staff for back-to-back shifts in one day. "It's archaic, it's not healthy or sustainable," she says. "I want Nomad to be part of a generation of chefs and restaurants that make a positive change in the industry."
For Michael Ryan in regional Victoria, the adjustment to a four-day trading week is novel, but it's paid off for staff wellbeing. "We're trying this 'crazy' approach where kitchen staff do a 38-hour week, which is not what I experienced [working in the industry]. But that's the reality and it's how it should be. We did it for staff to keep their hours at a normal rate, but also to make the job more attractive. Staff are certainly in a position of power at the moment so you have to create an environment that people want to work in."
Michael Ryan, chef and co-owner of regional restaurant The Provenance in Bechworth, Victoria. Photo: Peter Charlesworth
And then there's the pay. Wage growth in hospitality is not just slow, it's non-existent. "Hospitality is the lowest paid industry in the labour market, and over the past few years wages in the industry have generally not kept pace with inflation," says Wright. "So if you're working in hospitality, your wages are effectively going backwards."
Offering above-award wages is nice, but it's a solution often only within reach of restaurants backed by blockbuster hospitality groups and casinos. Instead, gestures such as offering work uniforms and nutritious staff meals can make a difference to morale.
"When I was training as a chef about eight years ago the staff meals could be pretty horrible," says chef Khanh Nguyen. At his restaurant Sunda in Melbourne's CBD, the "staffies", for which chefs are placed on a rotating roster to prepare, are the stuff of legend. On the afternoon Gourmet Traveller calls Nguyen, staff are sitting down to a meal of Hainanese chicken rice. "There's always greens and vegetables, carbohydrates, protein. Everyone needs to be nourished."
A collegiate work culture is also critical. At Liberté, tips are pooled to finance staff parties and getaways. At Ho Jiak, Devi Chatari recalls reassuring an apprehensive new staff member the restaurant was a safe and welcoming place to work. "She seemed very nervous, but I said: everyone is really friendly in Ho Jiak. Don't be scared about bullying here. We're all friends."
But here's the rub. The hospitality labour shortage has been years in the making, and it will take years to unravel. Wright, for one, would like to see a reformation of the visa system that offers more protections for temporary migrant workers, like untethering migrants from a single employer and giving international students access to welfare support. "These ideas are not radical in the sense they've been used before to good effect in other countries like Canada and under the permanent skilled visa in Australia [...] Often it takes a crisis to lead to new ideas being adopted, so I guess I'm optimistic in that sense."
Ryan too has his eye on the long game. "The current crisis has exposed the lack of training and investment in staff in the industry," he says. "It's not going to be solved in a generation. It's a decade-long problem we'll be dealing with."