Hospitality businesses will not be legally obliged to share tips with their teams as government expected to shelve its employment bill 'for the foreseeable future'

Tanwen Dawn-Hiscox

Tanwen Dawn-Hiscox

Deputy Editor

Hospitality businesses will not be legally obliged to share tips with their teams as the UK government is expected to shelve its employment bill 'for the foreseeable future', a senior government figure has told the Financial times

The bill would have made sure that the UK's two million hospitality workers were guaranteed a fair share of tips and discretionary service charge - a problem exacerbated by the fact that, in business minister Paul Scully's words, our lurch towards becoming a cashless society means that most gratuity comes through card systems, increasingly leading to “dodgy tipping practices.”

As well as laying out a statutory code of practice setting out how tips should be distributed to ensure fairness, it would have required a level of transparency from the employer's perspectiv as to how they were calculated.

In addition to regimenting tipping practices, the bill would have required employers to give their teams more predictable contracts, given protection for pregnant employees, created a single agency to enforce worker rights and made flexible working a default option.

Scrap the legislation, encourage best practice

Originally put forward by Sajid Javid in 2016, business minister Paul Scully committed to implementing the legislation last year, following a series of high-profile instances of hospitality businesses found to be taking shares out of service charge and tips instead of giving them to their employees.

The news, not confirmed but crucially not denied by the business department ahead of the Queen's Speech next week, has sparked anger from unions, as staff could lose out on thousands of pounds a year due to the government's failure to implement the new rules.

General secretary of the Trades Union Congress Frances O’Grady said that should the government fail to introduce the bill, "it will betray some of the lowest paid and most vulnerable workers in Britain,” she said, adding that “they will have conned working people.”

Meanwhile, the business department said that whatever its decision, the government would encourage that “industry best practice” be applied by employers in the sector.

“Workers should absolutely get the tips they deserve, and customers should have reassurance that their money is rewarding staff for their hard work and good service,” a spokesperson said.

The news comes days after the results of a survey were published by tipping application provider, Tipjar, showing that seven out of ten hospitality workers don't trust that they are paid correct tips, while nine out of ten would like to see more transparency as to their employer's calculations.

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Tanwen Dawn-Hiscox

Tanwen Dawn-Hiscox

Deputy Editor 5th May 2022

Hospitality businesses will not be legally obliged to share tips with their teams as government expected to shelve its employment bill 'for the foreseeable future'