The pursuit of regulatory reform in order to enhance organisational flexibility and efficiency appears to be ongoing in Australia. This is particularly salient in the service sector, where competition is strong and operating hours are often extended. In responding to these issues, government has sought to provide both employers and employees with additional regulatory options to better suit their individual needs; thereby offering what might be termed ‘regulatory choice’. While employers, on average, have engaged in these alternate forms of agreement making, those within the hospitality industry have been less enthusiastic about bargaining outside of the award system. The reasons for their reluctance have not been examined in depth, however. This paper therefore seeks to analyse the factors underpinning employers' bargaining decisions in order to develop a greater understanding of regulatory choice in Australian service sector firms. In doing so, the analysis focuses on employers' bargaining arrangements in the Australian luxury hotel sector. The findings indicate that regulatory choice is influenced by four primary factors: business/human resource management strategy; workplace characteristics; finances and perceived risk; and administrative issues. Contrary to the government's endeavours to enhance flexibility, some employers ‘choice’ of employment regulation was restricted. Regulatory choice appears to be significantly more complex than anticipated.
