Tips justice at last?

Five years after the government first promised it would take action on tips theft, legislation will finally be introduced that will ban businesses from swiping tips and service charge payments from workers.

While Unite welcomed the announcement by labour markets minister Paul Scully today (September 24), the union highlighted that the delay has unacceptably cost more than 2m hospitality workers an estimated £10,000 each. Unite made this estimate based on a survey of members working for casual dining chain Pizza Express, in which staff reported they were losing £2000 a year from deductions on card tips.

Unite has also said that its long-running tips justice campaign is not yet over as the union will continue to fight to ensure that the law is strong enough and is properly enforced to stop all forms of tipping abuse.

As far back as 2016, then-business secretary Sajid Javid ordered a consultation on tipping practices that ended in June that year.

Hospitality workers then waited more than two years before prime minister Boris Johnson’s predecessor Theresa May announced in 2018 that she would introduce legislation to bar restaurants from taking staff tips.  She then failed to take any action in her time in office. In 2019, a pledge to ban restaurants from taking staff tips was included in the Queen’s Speech, but again nothing was done.

Earlier this year, Unite wrote to business secretary Kwasi Kwarteng, warning that as the hospitality industry opens up, “employers are again interfering with tips allocation and distribution, resulting in substantial cuts in amounts received”.

“This combined with the acceleration of cashless pay and home deliveries, has created a perfect storm which has effectively wiped out the value of the 2020 and 2021 uplifts in the national living wage and the national minimum wage,” the letter read.

The letter came as Unite staged further protests against restaurants deducting card tips from staff – notably Pizza Express – just as the hospitality industry returned from lockdown.

On Friday (September 24), labour markets minister Paul Scully made the announcement of the impending change in legislation, which will make it illegal for employers to deduct tips and service charges from restaurant staff.

Businesses will be faced with fines if they flout the law, and will also be forced to compensate workers. But action against employers for breaking the law will be dependent on workers taking the employer to an employment tribunal. Under the new legislation, workers will also have a new right to request information from their employer about the tipping record, which can be used by workers as evidence in an employment tribunal.

Moreover, a statutory code of practice will be introduced, following consultation with businesses, workers and other stakeholders, to ensure distribution of tips among staff is fair and transparent. Unite has said that the consultation must have workers and their unions’ voices front and centre.

Unite member Sarah*, an anonymous Pizza Express worker, told UniteLive she was both hopeful about the new legislation but remained doubtful about how the legislation would work in practice.  

“I’m paid the minimum wage and recently lost 30 per cent of my take home pay when my employer Pizza Express cut my tips overnight,” she said. “So if this new tipping legislation and code of practice is to make a real difference to workers like me, then it needs to stop all forms of tipping abuse and it needs to finally stop employers like mine from hiding behind tronc schemes to steal the tips from one group of workers to subisidise the wages of another.

“Right now my colleagues and I have no route to challenge this decision, so if it’s true that we’ll now have access to a tribunal backed up with a right to demand information, that’s a huge step forward,” she added. “But believe me, there must be no loopholes, because I’ve been promised fair tips for a long time now, and from my experience if there’s a loophole to exploit bad employers will find it. “

Unite general secretary Sharon Graham said that it was “shocking that this group of mainly young workers has had to wait five years for government action to tackle the tips scandal”.

“We will continue to challenge abuses in the workplace and Unite will keep fighting to improve the jobs, pay and conditions of the hospitality workforce,” she vowed.

Meanwhile, Unite national officer for hospitality Dave Turnbull noted,  “We are pleased that our calls for a code of practice have been heard, but such a code must not leave workers open to abuse of unfair distribution systems such as at Pizza Express where tips are being used to subsidise wages of workers in a disproportionate way.

“Unite – as the largest union for hospitality workers – should be closely involved in the discussions which develop this statutory code,” he added. “For those that have been working in the sector since 2016, we calculate, based on a survey of our Pizza Express members, that hospitality workers have lost on average £2,000-a-year in tips which is disgraceful.

“We regard this as a first step to stamping out the long hours culture and exploitative working environment that bad employers have got away with for far too long in the UK hospitality sector.”

By Hajera Blagg

*Name changed to protect identity