Business secretary Sajid Javid sided with Unite as the government published yesterday (May 1) a long-awaited report on tipping practices in restaurants and hotels.
In what Unite officer for the hospitality sector Dave Turnbull called a ‘massive victory’ for waiting staff, Javid has concluded that waiters should receive their tips left by customers in full.
The current system often sees some or all of waiters’ tips being withheld by their employers under the guise of a ‘service charge’ or ‘admin fees’ deducted from credit card tips.
After an eight-month investigation that was instigated by pressure from Unite, the government is now proposing that the voluntary code of practice governing tipping practices be put on statutory footing; that customers should be made fully aware of what is done with the tips they leave; and that employers’ deducting of tips should be prevented or limited unless compliance with tax law is required.
The business secretary said the government proposals will “make tipping fairer, clamping down on unfair practices and securing a better deal for the millions of workers in the service industry. We will look closely at all the options, including legislation if necessary,” he added.
Now the government has launched a two-month consultation ending on June 27 and invites the public to contribute their own ideas.
“The is fantastic news,” said Turnbull. “It has taken us eight months to get this report to conclude but at long last it has and come down on the side of the waiting staff. It shows that even the lowest paid and most vulnerable workers can have a powerful voice when they stand united with their union behind them.
“It is also a massive and rightful victory for all those waiting staff who have worked tirelessly to expose sharp practices in the hospitality industry,” Turnbull added. “All they want is what any worker wants – to take home what they have earned, no corners cut.
“But it will need the support of law to make this happen – it is patently obvious that too many employers do not respect the spirit or word of the voluntary code,” he went on to say.
Introduced in 2009, the voluntary code of practice governing tipping practices calls on employers to allow waiters themselves full control of tips and their distribution among restaurant staff.
But despite the code of practice being in place for nearly a decade, unscrupulous tipping practices continue unabated. Last year, Unite shined a spotlight on a common practice among high street chains, in which restaurants deduct ‘admin fees’ from tips left on credit cards. Restaurants bosses also often pocket some or all of a ‘service charge’ which many customers believe goes to staff.
The publicity and the pressure from both staff and consumers joining together under a coordinated Unite campaign prompted many restaurants to change course – including Pizza Express, Zizzi and Giraffe among others.
However, restaurants like Jamie’s Italian continue to deduct a percentage of sales from credit card tips, while Prezzo and Strada still deduct an administration fee for handling the tips and Bill’s restaurant has been accused of pocketing a large proportion of the service charge automatically added to diners’ bills.
The union is currently campaigning to stop hotel chain Melia from using practices which prevent staff from receiving an equitable and fair share of the tips left for them. Turnbull highlighted that the latest news about the government’s proposals are great news for consumers, too, who “have been appalled to learn that the tips they left for their waiter or waitress never made it to them.
“Diners have been a huge support to the workforce – without their help we may not have ever won pay justice,” he added.
“The problem has always been that tips paid on a credit card and service charges are deemed the property of the employer,” Turnbull argued. “As they own them they can do what they like with them. Until staff are recognised as the lawful owners of their hard earned tips with complete control over how they are shared out, rogue employers will continue to cream off staff tips.
“The minister’s announcement, therefore, should send the message right across the sector that the days of using workers’ tips to top up pay or to be swallowed up elsewhere in a business are over.
“Many decent employers, like Giraffe and Pizza Express have already said that they will do this so we see no need for others in the industry to delay,” Turnbull went on to say. “Hotel chains like Melia, who are refusing to play fairly by their waiting staff, ought to consider today’s announcement a huge wake-up call.
“We say to the industry, do not use this consultation period to tread water on this or throw rocks in the road. Just get on and do the decent thing – be completely transparent about the allocation of tips to different grades of staff and accept that workers should keep their tips.”
Whether you work in the hospitality industry or go to restaurants as a consumer, the government seeks your advice in the consultation. Make sure your voice is heard – find out more here.