By Angela Rayner MP
THIS month, I want to discuss the hard working ladies and gentlemen of the hospitality sector as they gear up for their busiest time of year.
I have joined forces with Fair Hospitality, which represents workers in hotels, bars, restaurants, cafes, brewing, casinos, clubs and catering, on Labour’s proposals for genuine fair tips.
No employer should be able to deny their staff the tips they have earned but research shows that workers may have collectively lost £1 billion in tips over the past six years.
As things stand, cash tips are legally the property of staff. However, businesses that receive tips by card have the choice of whether to keep it or pass it on to workers.
Tips are a significant part of the pay of workers in the hospitality sector and other service industries. In the current cost-of-living crisis they can make a huge difference for millions of people across the UK.
When customers want to do the right thing and reward those serving them in bars, cafés, pubs and restaurants, there is no excuse for businesses to hold on to that money for themselves.
I was proud to set out plans to ensure all employers in the hospitality sector hand over ALL tips, gratuities and service charge payments to workers in full with statutory taxes being the only deductions.
There have been a number of Government consultations and proposals in this area, beginning with a 2015 call for evidence.
This was followed by a 2016 consultation seeking feedback on whether employers should be prevented from making any deductions from tips.
In 2018, the Government announced its intention to legislate to prevent employers from making deductions from tips.
The Conservatives promised to tackle this issue in their General Election manifesto in 2019 and also in an Employment Bill that was dropped from the last two Queen’s speeches but so far, this has not been actioned.
In September 2021, the Government published its response to the 2016 consultation stating it believed tips should be, ‘discretionary, and clear to consumers that they are voluntary, received by workers, and clear and transparent to consumers and workers in terms of how the payments are treated.’
It concluded the responses it had received to the consultation suggested the current guidance and rules are “not sufficient to achieve” these goals.
A Private Member’s Bill is currently making its way through Parliament and I am pleased that progress is being made but it does not close loopholes that allow employers to choose how tips are distributed and instead encourages a pay arrangement that lets businesses fairly share staff tips. This should be compulsory for firms with more than 20 employees.
I stand in solidarity with our hardworking hospitality staff and will continue to support efforts to press the Government on this issue so that those working in the sector will finally see their tips protected.