Gov’t Consults on Handling of Tips

In response to media reports [BBC News, 10^th August 2015) the Government has launched a consultation to determine whether it should take any further action to ensure a fair and transparent practice in relation to tips.

Currently this area is covered only by a voluntary Code of Practice, and this only goes so far as to state that workers understand the policy, and can explain this [to customers] without risk of detriment – there is no law that specifically protects workers if they chose to explain to a paying customer that they & their colleagues may not directly receive any tip left with the payment, and so in an industry such as hospitality where turnover of staff can be high, there is no protection for workers that seek to explain a tip (often particularly those paid by card) will not go directly to the workers involved – so very little protection in practice.

A potential problem with the voluntary code (apart from being voluntary) does appear to be the lack of information that businesses provide generally. An article in the Manchester Evening News published only days before the consultation was released comments on the practice of local restaurant chain that reportedly said some larger parties have a 10% service charge added to the bill, and a part of that is kept by the owners, used to pay for staff welfare items.

It’s not clear from the websites of this business[1] that this fee is added to larger parties’ bills, let alone whether it’s discretionary, as the only menu available online that includes mention of a service charge is the Christmas party menu, and this is discretionary, applying to parties of 6 or more.

The Manchester Evening News states that an anonymous waiter claims the service charges are only shared in the month of December.

(It’s not clear whether the business in the article does subscribe to the Code of Practice, but as a voluntary code, there will be plenty of other businesses adopting similar policies & practicies.)

The consultation will close on 10^th November 2015, and any further action the Government then deems necessary will follow.

[1] http://albertsshed.com/menus/a-la-carte/
[1] http://albertsshed.com/christmas-party-menu/

Filed under: General News by Employment Law Clinic           Post created on: August 31st, 2015