Compliance and Regulation in Australian Hospitality Industry Report

This report delves into the critical aspects of compliance and regulation within the hospitality industry, focusing on the Australian context. It begins by outlining essential compliance areas, including fire safety and hygiene, referencing relevant legislation. The report then explores various types of insurance vital for hospitality businesses, such as theft, business interruption, and equipment breakdown insurance, providing real-world examples. Furthermore, it covers superannuation obligations, detailing the steps employers must take to comply with superannuation guarantee legislation. The report also examines different types of taxes relevant to the industry, including fringe benefits tax, goods and services tax (GST), and payroll tax, and it provides a concise overview of industrial relations, differentiating between industrial awards and enterprise agreements. The report uses examples like the Marriott Group and CHUBB insurance group to illustrate its points and concludes by providing references for further reading. You can find more solved assignments and study resources on Desklib.

Running head: COMPLIANCE AND REGULATION IN HOSPITALITY INDUSTRY
Compliance and Regulation in Hospitality Industry
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1COMPLIANCE AND REGULATION IN HOSPITALITY INDUSTRY
Table of Contents
Question 1: Compliance.............................................................................................................2
Question 2: Insurance.................................................................................................................3
Question 3: Superannuation.......................................................................................................4
Question 4: Taxation..................................................................................................................4
Question 5: Industrial Relations.................................................................................................6
References:.................................................................................................................................7

2COMPLIANCE AND REGULATION IN HOSPITALITY INDUSTRY
Question 1: Compliance
Regulatory compliance for the hospitality industry can be referred as a set of
regulations which the hotel owners are expected to customarily with. In case any of the
owners of any organisation fails to comply with these regulations, it can amount to huge
fines, and even to imprisonment in some cases. In this context, some examples can be
provided to reflect the exact nature of the compliance regulations that is essential for the
hospitality groups to follow1.
The first area in this context is Fire Safety. Fire safety in the hotels is much more than
simple installation of fire extinguishers as well as exit signs. The Regulatory Framework of
2005 specifies that only regular checking of the fire safety equipment is not enough. Rather,
ongoing risk assessments on regular basis is also very important. Such checks are essential to
make sure that the safety obligations like emergency doors are not damaged or locked. All
staff of the hotel group should be fully trained for fire safety and have a detailed
understanding of the escape plan of the building. In this context, fire planning of the Marriot
Group of Hotels can be highlighted, who have purchased all fire retardant furniture.
The next area is hygiene. As per the Health and Safety Act 1974, of the country, the
hospitality groups are supposed to maintain highest possible hygienic state2. The hotel
interiors should be absolutely spotlessly clean and guest washrooms as well as swimming
pool and the gym should have correct hygienic standards. These would not only ensure that
the hotels maintain a sound hygiene, rather the guests would have a pleasant experience of
visiting the hotel also.
1Al Yousuf, Mariam, Eunice Taylor, and Joanne Taylor. "Developing a government strategy to meet
international standards of food safety across the hospitality industry." Worldwide Hospitality and Tourism
Themes 7, no. 1 (2015): 4-16.
2Gray, Garry C., and Susan S. Silbey. "Governing inside the organization: interpreting regulation and
compliance." American Journal of Sociology 120, no. 1 (2014): 96-145.

3COMPLIANCE AND REGULATION IN HOSPITALITY INDUSTRY
Other than that, based on the Electricity at Work, 1989, Gas safety, 1998 and Building
Regulations, 2007, appliance testing, checking of the boilers at the hotels and lastly also
undertake regular basis energy inspections.
Question 2: Insurance
The three types of insurance that the Australian hospitality organisations mainly
require include the following:
Theft insurance:
Theft insurance could be segregated into three categories. The first one is theft that
covers the loss of stocks and contents from armed hold-up, attempted theft, theft or
threatened or actual assault. The second one is money, which covers damage to the money of
the business from various sources like armed hold-up, theft and fire, either in transit or
business premises. The final one is staff dishonesty, which covers stealing the business
property by any particular staff or in combination with others3. Example of the TropWorld
group of Hotels in Australia can be highlighted. In this context, the theft insurance law was
applied and the innkeeper dishonesty charge was brought. Finally, the management was held
liable for paying back the sell price of a leather bag amounting to AUD $1310 to the lodger.
Business interruption insurance:
The incidents that are not within the control of the organisations might lead to even
closure of their businesses. Therefore, this insurance policy includes operating costs like
franchise and lease fees and it might cover food spoilage as well. For example if the building
catches fire, this insurance can be used to cover the cost of major percentage of the products.
3Cummings, James R. "Effect of fund size on the performance of Australian superannuation funds." Accounting & Finance 56, no. 3 (2016): 695-725.

4COMPLIANCE AND REGULATION IN HOSPITALITY INDUSTRY
However, the amount that is to be provided is under the decisive capacity of the insurance
provider.
Equipment breakdown insurance:
In the absence of functioning equipment, it is not possible for any hospitality
organisation to trade, which might hamper the overall business operations. Therefore, this
insurance covers the financial cost of replacing or repairing broken fixed equipment like cool
room compressor, refrigerators and others4. In this context, the example of the CHUBB
insurance group can be highlighted. They give the small hospitality groups insurance cover
for
 Utilities
 Pulp and paper
 Printing
 Water treatment
 Heavy industry
 Office and commercial buildings
Question 3: Superannuation
The superannuation guarantee legislation covers all staffs regardless of whether they
work as full-time, part-time or casual staffs. This implies that as an employer, certain steps
are needed during the process of employment for fulfilling the obligations5. In order to meet
4"8 Insurance Options For Hospitality Businesses". 2018. @AAMI. https://www.aami.com.au/business-insurance/small-biz-tips/8-business-insurance-options-cafe-restaurant-takeaway-
shop.html.
55.Lewis, Phil, Alice Richard, and Michael Corliss. "Compliance Costs of Regulation for Small Business." Journal of Business Systems, Governance & Ethics 9, no. 2 (2014).

5COMPLIANCE AND REGULATION IN HOSPITALITY INDUSTRY
the legal obligations, the employers and business owners need to follow all the below-
discussed steps:
 Payment of super contributions for the eligible staffs by the cut off dates in each
quarter
 Paying a minimum of 9.5% contribution amount of the overall base of earnings
 Verifying if any staff is eligible for a selection of super fund
 Providing the eligible staffs with a standard selection form
 Transferring employee tax file numbers (TFN) to the super fund within two weeks of
obtaining a declaration form of TFN; however, if no contributions are made during
the period, the tax file numbers could be provided at the time of contributions
 Keeping superannuation payment records and that a selection of super fund has been
provided to the eligible staffs
Question 4: Taxation
Type of Tax How the tax applies to the business
Record(s) that would
need to be kept.
1 Fringe Benefits Tax This type of tax is a tax payable from
the end of the employers for benefits
incurred to their staffs or any of their
associates like family members in
place of wages or salaries. This is
different from income tax and it is
computed based on the taxable
amounts of the provided fringe
benefits6.
1. Calculation of
fringe benefit tax
amount
2. Registration for
fringe benefit tax
3. Keeping essential
records
4. Reporting fringe
benefits on the

6COMPLIANCE AND REGULATION IN HOSPITALITY INDUSTRY
payment summaries
of the staffs
5. Lodging return and
paying FBT amount
to the ATO
2 Goods and Services
Tax (GST)
This is a wide-based tax of 10% on all
products and services applicable to all
the Australian hospitality
organisations.
Records related to
purchases and sales
need to be kept for
accurate reporting of
GST liabilities and
claiming GST credits.
3 Payroll tax` This tax is computed based on the
wages amount paid per month and
collected in each state where the staffs
of the organisations work.
1. Records of
allowances and wages
paid to staffs
2. Payment and report
copies provided to the
ATO
3. Payment summary
copies
6Kitching, John, Mark Hart, and Nick Wilson. "Burden or benefit? Regulation as a dynamic influence on small business performance." International Small Business Journal 33, no. 2 (2015):
130-147.

7COMPLIANCE AND REGULATION IN HOSPITALITY INDUSTRY
Question 5: Industrial Relations
Industrial award could be defined as a legally binding document setting the minimum
conditions, terms and wages for all the wage categorisations in an occupation or a sector. All
awards include definitions and interpretations, coverage, employment types, allowances,
minimum wage rates, overtime, breaks, superannuation, classifications and leave. On the
other hand, enterprise agreement could be defined as a legally binding document setting out
the employment conditions and terms between a staff or a group of staffs and an employer or
a group of employers. This agreement could include different aspects related to employment
like employment conditions, training, leave, remuneration and consultation. Some instances
include restricting an organisation from utilising labour hire staff along with charity or social
responsibility clauses7. As the existing employees of an organisation are excited in sharing
award-related news with others, the awards could help in building motivation within the
team. With the help of enterprise agreement, the employees of an organisation could enjoy
more flexible hours and rosters for fulfilling the exact operational requirements of the
business.
7"Modern Awards & Enterprise Agreements". 2018. Business.Gov.Au.
https://www.business.gov.au/people/hiring/pay-and-conditions/modern-awards--enterprise-agreements.

8COMPLIANCE AND REGULATION IN HOSPITALITY INDUSTRY
References:
"8 Insurance Options For Hospitality Businesses". 2018. @AAMI.
https://www.aami.com.au/business-insurance/small-biz-tips/8-business-insurance-options-
cafe-restaurant-takeaway-shop.html.
"Modern Awards & Enterprise Agreements". 2018. Business.Gov.Au.
https://www.business.gov.au/people/hiring/pay-and-conditions/modern-awards--enterprise-
agreements.
Al Yousuf, Mariam, Eunice Taylor, and Joanne Taylor. "Developing a government strategy
to meet international standards of food safety across the hospitality industry." Worldwide
Hospitality and Tourism Themes 7, no. 1 (2015): 4-16.
Cummings, James R. "Effect of fund size on the performance of Australian superannuation
funds." Accounting & Finance 56, no. 3 (2016): 695-725.
Gray, Garry C., and Susan S. Silbey. "Governing inside the organization: interpreting
regulation and compliance." American Journal of Sociology 120, no. 1 (2014): 96-145.
Kitching, John, Mark Hart, and Nick Wilson. "Burden or benefit? Regulation as a dynamic
influence on small business performance." International Small Business Journal 33, no. 2
(2015): 130-147.
Lewis, Phil, Alice Richard, and Michael Corliss. "Compliance Costs of Regulation for Small
Business." Journal of Business Systems, Governance & Ethics 9, no. 2 (2014).