Many years ago the former Prime Minister Harold Wilson once remarked that “a week was a long time in politics”.
Given the political musical chairs that we’ve all been observing recently he was clearly right, but a what might be a long time in politics feels like a lifetime when it comes to the Government’s latest planned changes to the tipping legislation which has now seen more twists and turns than Andy Burnham’s rise to number 10.
A brief recap. Back in October 2024 the Employment (Allocation of Tips) Act became law, requiring businesses to pass 100% of tips and service charges to their staff in a “fair” and “transparent” manner.
The legislation passed through parliament with cross-party consent before the last election, but with a warning from the Labour party that, in their view, it didn’t go far enough.
Trade union reaction
Some 11 days after the law took effect the (now Labour) Government announced changes, principally involving an obligation on businesses to formally consult with their workers regarding their tipping policies and promising to make changes to the statutory code of practice which accompanied the new law.
Following a Government consultation earlier this year, the revised draft code of practice was published on 29 June and laid before parliament for approval.
As well as providing details as to how the new consultations had to be managed, the updated draft included new clauses tightening up some other aspects of the code, particularly in respect of staff working in central or non-public places of business and fixed, minimum or guaranteed awards of tips (although not banning or prohibiting either).
The code also confirmed the consultations were advisory and not binding on businesses and operators did not necessarily have to act in line with the views of a numerical majority of workers where to do so might be unfair to the minority.
Trade unions were, to say the least, unimpressed. Unite’s Sharon Graham called on the Government to withdraw the draft, and claimed the Government was “reneging” on a previous commitment to hand workers themselves control of tips.
Uncertainty increased
Then last Monday afternoon, the Government quietly withdrew the draft code from parliament without any warning, notice or explanation.
Some suggested a political reasoning connected to the new Prime Minister, union objections and a possible “turn to the left”, but more likely is that the withdrawal is procedural.
The Government had previously promised to give stakeholders an opportunity to comment on the draft before passing it to MPs and peers to approve, but had failed to do so.
Finally yesterday (Thursday 16 July) the Government confirmed the tipping changes arising from the Employment Rights Act, which were due to take effect on 1 October 2026 would instead now be introduced “by the end of the year”.
What this delay does to is increase uncertainty for operators. While there is a further opportunity for the sector to try and influence the final version of the code (after just 29 operators engaged with the previous consultation), that opportunity also extends to the trade unions who will, doubtless, try to reopen old arguments in the hope of persuading the new Burnham administration to go further.
In their original consultation response the Government praised the sector for adopting and complying with the original tipping legislation saying they were “encouraged” by the feedback received.
Hopefully, given this, this week’s shenanigans over the new draft code will prove to be just an irritant for the sector and not a harbinger of bad news to come.
