This comes as business secretary Sajid Javid announced a two-month consultation period on possible actions the Government could take to increase transparency and fairness, including making the current voluntary code of practice for tipping statutory.
Dave Turnbull, unite officer for the hospitality sector, said: “This is fantastic news. 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.
“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.”
The Government also asked for recommendations as to how operators across the industry could be encouraged to adopt ‘tronc’ systems, which distribute tips to employees based on staff agreements without employer input.
'Transparent and independent'
Turnbull said: “What we are seeking is transparent and genuinely independent tronc systems where staff, back of house and front of house, can agree among themselves without employer interference or influence on how any tips should be shared out and on what criteria.”
The union previously suggested during a Government ‘call for evidence’ last year – spurred by revelations last year that some national chains were holding back some or all of staff tips – that HMRC guidelines on tipping were not fit for purpose.
“They are tax and NI guidelines and do not factor in important employee relations issues. We recommend that ACAS (Advisory, Conciliation and Arbitration Service) be tasked to draw up model tronc committee guidelines in consultation with employers and unions,” said Turnbull.
Unite would be making a similar proposal in response to the consultation period and will be raising the issue in a meeting it sought to arrange with the Association of Licensed Multiple Retailers (ALMR), he added.
The hospitality sector has largely welcomed the Government’s move, with the Sustainable Restaurant Association (SRA) saying it supported any proposals to implement a ‘fairer regime’ and the British Hospitality Association (BHA) saying customers should be able to reward good service and know where their money ends up.
However, the ALMR said it had conducted a survey of 7,000 members over the past year and found no evidence of any of them abusing the current tipping system.
Chief executive Kate Nicholls said it was right that operators had ‘freedom and flexibility’ to reward all team members rather than just one individual member of staff.
She said: “With the rise of cashless transactions, customers are increasingly rewarding good service through credit card payments – these have to be processed through the company payroll in order to ensure that tax is properly accounted for and paid – this is not the case with cash tips where the individual has to declare the tax and it is this which has led to some confusion and we welcome measures to increase transparency.
“It means that there will be a deduction, but it means that everyone receives a fair share, including the tax man. No company should be profiting from tips and service charges, but equally no company – particularly small businesses – should be penalised for collecting and processing tax on behalf of the Government.”