Government ministers have come under renewed pressure from workers in the hospitality industry who demand action to prevent bosses from taking tips which belong to them. Despite originally promising to address this, the government are yet to publish any response following their 2016 consultation on the matter, leading to claims that they have ditched the plans altogether.
This continued dispute regarding the distribution of workers tips has come about following the decision of TGI Friday’s employees to strike over what they claimed to be the organisations “unfair tips policy”. Waiting staff at the American themed chain decided to take action having been told that 40% of the tips they received via debit or credit cards would be taken from them and given to kitchen staff, in favour of issuing the latter with a pay rise.
Unite trade union, who represent bar and restaurant staff, claim TGI’s decision could cost some waiting staff up to £250 a month and have organised protests in response outside 30 of the organisations UK establishments.
Despite the then business secretary, Sajid Javid, announcing plans in 2016 to ban bosses from taking tips that are left for staff, this practice remains commonplace two years on. At the time Javid even suggested that ministers would be prepared to make legislative changes to appropriately safeguard workers’ rights to their tips, however this legislation has not been forthcoming.
In contrast to popular belief, there is no requirement under existing legislation for organisations to provide staff with the tips they earn. Instead, the non-mandatory Code of Best Practice simply requires organisations to make staff aware of their approach when it comes to distributing service charges, tips and gratuities.
With this being said, organisations do have to ensure that they are not using tips as a way of ‘topping up’ staff wages to meet National Minimum Wage (NMW) requirements, as those that do could be handed significant financial penalties as part of HMRC’s naming and shaming initiative of NMW offenders.
It would appear that in the absence of any legislation outlawing the practice, staff are choosing to take matters into their own hands in efforts to retain the tips that are left to them. To prevent any potential unrest, organisations should consider reviewing existing practices and consulting with staff on potential amendments that would lead to a more favourable policy on workplace tips.