The hospitality industry in Australia plays a vital role in our economy and social fabric, providing diverse employment opportunities and highly valued services to locals and visitors alike. However, operating a hospitality venue involves navigating a complex landscape of statutory regulations designed to ensure the safety, fairness, and sustainability of businesses within this sector.
From licensing laws and food safety standards to health and safety requirements, hospitality operators must comply with numerous legal obligations. Understanding these regulations is not only essential for avoiding potential penalties but also for fostering a safe and enjoyable experience for both staff and patrons.
Our previous article Duty of care: Understanding your obligations as a hospitality license – Part 1 focused on unpacking duty of care obligations. As a follow up, this article provides an overview of the key statutory regulations hospitality venues must adhere to and highlights the importance of staying informed about legal changes that can impact business operations.
Statutory Regulations
In Australia, the specific legislation outlining the responsibility of businesses may vary depending on the state and territory in which you operate.
Below we have detailed eight key areas for consideration and would direct licensees to review the legislative and regulatory requirements for their state or territory:
1. Responsible Service of Alcohol (RSA)
RSA mandates that licensees and their staff ensure that alcohol is served responsibly. This includes measures such as:
- Refusing service to intoxicated patrons.
- Preventing underage drinking.
- Providing free water in venues where alcohol is served.
- If the premises is licenced, refusing entry to a drunken or disorderly person.
2. Security in licensed venues
For licensed venues there are reporting obligations & requirements related to incident reporting and retention of CCTV footage. Venues are required to document and report incidents related to the service of alcohol and are required to retain CCTV footage for a minimum period, usually 30-days.
3. Security personnel
Venues must adhere to various statutory regulations concerning security personnel, particularly regarding the use of force and liability in cases of assault and battery.
Some of the key regulations and legal requirements are outlined below:
- Security personnel must be licensed under the relevant state or territory legislation.
- Security guards must complete training in crowd control, conflict resolution, and legal use of force for which an additional licence or a sub-class of licence may be issued depending on the state.
- Excessive force cannot be used and security personnel must act in accordance with the equivalent state laws.
- Reasonable force may only be used to remove a patron if the patron is behaving violently or causing a disturbance or if there is a legitimate need to protect people or property.
- Unlawful force (e.g. punching, excessive restraint) can lead to criminal assault charges.
Hospitality venues can be held vicariously liable for the actions of their security personnel. If a patron is injured on your premises due to unjustified force, you may face a civil lawsuit for damages, fines and penalties under occupational health & safety laws as well as the potential loss of your liquor license if non-compliance with statutory regulations is found.
Hospitality licensees should also ensure that proof of public liability insurance is obtained when hiring third-party security personnel.
4. Drink spiking
Licensees have a responsibility to provide a safe venue for customers. It is expected that appropriate risk management measures are developed to reduce the risk of drink spiking events such as:
- Adequate training for bar staff in responsible service of alcohol and the ability to identify and respond when incidents happen.
- Adequate training in an accredited first aid program to enable effective response in the event of an emergency.
- Prompt collection of unattended glasses, and letting customers know that unattended drinks will be collected for their safety.
Drink spiking events must be recorded in the venue’s incident register.
5. Work health and safety (WHS) laws
WHS laws require licensees to provide a safe environment for both their employees and patrons. The workplace environment must not pose physical or psychological risks to health and safety. Examples of environmental factors that may harm an employee or patrons include:
- Handling glassware and broken glass.
- Cuts and burns whilst preparing food.
- Lifting heavy or awkward objects like kegs, sacks and slabs.
- Repetitive manual work like cleaning floors.
- Occupational violence, sexual harassment or threats.
- Slips, trips and falls on wet floor, oily floors or because of poor lighting.
- Noise exposure from loud music.
- Exposure to hazardous substances like cleaning chemicals.
WHS laws also place an obligation on businesses to report on notifiable incidents. Licensees must report incidents that include:
- The death of a person.
- A person needing medical treatment within 48 hours of being exposed to a hazardous substance.
- A person needing immediate treatment as an in-patient in a hospital.
- A person needing immediate medical treatment for one of the following injuries: amputation, serious head injury or serious eye injury, removal of skin (example: de-gloving, scalping), electric shock, spinal injury, loss of a bodily function, serious lacerations (example: requiring stitching or other medical treatment).
- An uncontrolled escape, spillage or leakage of any hazardous substance, including dangerous goods within the meaning of the Dangerous Goods Act 1985.
- An implosion, explosion or fire, or electric shock.
- The fall or release from a height of any plant, substance or thing, or the collapse, overturning, failure or malfunction of, or damage to, any plant.
- The collapse or partial collapse of a building or structure.
6. Food safety
The Australia and New Zealand joint food regulatory system is designed to protect the health and safety of consumers. It is a complex system combining laws, policies, standards, regulations, rules and guidance all of which inform the industry and consumers about food safety, labelling, composition and food-handling requirements. The system is designed to ensure consistent, appropriate and proportionate regulation in respect of the management of food safety risk.
The food safety standards aim to lower the incident of foodborne illness. They place obligations on venues to produce & serve food that is safe and suitable to eat. These standards include hygiene and handling regulations, record keeping, temperature control as well as cleaning and sanitising requirements.
7. Gambling
Gambling regulations are governed by a combination of federal, state and territory law. These regulations require venues to obtain the appropriate licenses to operate gaming machines or conduct other gambling activities. They also dictate the number of gaming machines a venue can operate as well as set out training requirements for staff namely responsible gaming practices and money laundering.
8. Wages
The key regulatory frameworks in place to ensure fair pay and safe working conditions are the Fair Work Act 2009 which establishes minimum employment standards, the Hospitality Industry award which outlines minimum wages rates, overtime pay & leave entitlements and the Superannuation Guarantee requiring employers to make superannuation contributions for eligible employees.
Consequences of non-compliance with laws and regulations
Regulatory bodies may impose sanctions on licensees who fail to meet their obligations. This can include fines, penalties, or even the suspension or revocation of a venue’s liquor license. In addition, compliance inspectors or police officers can issue infringement notices to licensees.
Examples of fines and penalties issued for non-compliance include:
- A bar in New South Wales was fined $10,000 for serving alcohol to a minor during a compliance check.
- A restaurant in Victoria was fined $20,000 for failing to comply with food safety standards, including inadequate temperature control of food items.
- A hospitality venue in Queensland faced penalties totaling $20,000 for misclassifying workers and not paying entitlements.
- A bar in Brisbane was fined $15,000 for failing to conduct background checks on its employees. The bar had hired a bartender who had a history of drug use and violence. The bartender was eventually arrested for assaulting a customer at the bar.
Appropriate insurance coverage for hospitality venues
Bellrock’s approach is to view insurance as the “last line of defence” for a business. A comprehensive insurance programme plays a crucial role in transferring risk associated with compliance with statutory regulations and should be considered as the final stage of a wholistic risk assessment and risk management process. Seeking guidance from a qualified risk advisor with experience in the hospitality sector will ensure that insurance is tailored to the nature, size, maturity and location of the business in question and responds appropriately in the event of a claim.
The following range of insurance products should be considered for hospitality licensees:
Public & Product Liability
Public liability insurance helps mitigate risks associated with serving alcohol, ensuring that venues are covered if a patron suffers injury due to intoxication or if legal action arises from serving underage individuals (although it should be noted that fines or penalties issued by the regulator for serving a minor are not typically covered under a public liability policy). Some public liability policies also extend to security personnel related incidents including claims of excessive force or injury.
Product liability insurance protects against claims related to foodborne illnesses or contamination, shielding businesses from costly lawsuits and reputational damage.
Without adequate coverage, venues may face costly lawsuits, regulatory fines (where covered), and the potential loss of their liquor license thereby jeopardizing their operations.
Workers compensation & employment practices
Compliance with WHS and food safety laws is crucial, and the right insurance helps venues manage these risks effectively. Workers’ compensation insurance ensures staff receive financial support for workplace injuries, covering medical expenses and lost wages.
Additionally, employment practices liability insurance covers disputes related to wages, unfair dismissal, and workplace harassment, protecting businesses from expensive legal battles.
Management liability
Management liability insurance further assists in covering fines and legal expenses for breaches of WHS regulations, ensuring venues remain operational despite unexpected compliance issues.
Cyber Insurance
Cyber liability insurance is also essential, especially for venues operating gaming machines as it can help safeguard against the costs associated with data breaches and attacks by threat actors.
By remaining up to date with the relevant legislative framework in your state or territory and responding with appropriate risk management protocols and adequate insurance, hospitality licensees can confidently meet their legal obligations, minimise financial risks, and focus on providing a safe and enjoyable environment for patrons and employees alike. Contact a Bellrock Advisor if you’d like to discuss risk management for your hospitality business.
