Labour leader Jeremy Corbyn has pledged to introduce legislation that would ensure hospitality staff keep 100% of their tips, if his party is elected.
Corbyn said Labour would make it illegal for businesses to take a cut of tips paid by debit or credit card, charge waiting staff to work or pocket “optional” service charges.
Corbyn said: “Tips should be kept by the staff who earn them, not employers. It’s not fair or right that in businesses across the country, hardworking hospitality workers have had their tips pocketed by their bosses under the guise of bogus admin fees, to cover breakages, till shortages or customer walkouts.
“Labour will make it illegal for rogue employers to make deductions from tips, so staff get to keep 100%, and customers know who their money is going to.”
But, Peter Davies, managing director of WMT accountants and adviser to hospitality businesses, told The Caterer that stringent rules could end up hitting both operators and their employees.
He explained: “Jeremy Corbyn has said that any future Labour government would ban businesses from retaining or keeping any element of tips or discretionary service charges, even to cover genuine and unavoidable costs like fees levied on the money by credit card companies.
“At a time of rising cost pressures elsewhere this is unwelcome news for operators who may decide that the costs of running a tronc system – which delivers significant benefits to staff through long-standing tax reliefs – can no longer be justified. Whilst businesses should not use admin charges to profiteer, and should not take excessive sums, to add on yet another cost to swallow at a time when restaurants are closing and jobs are threatened hardly seems fair.
“Staff will, however, never be able to keep 100% of the money left by customers as HM Revenue & Customs will generally want at least 20% of it themselves.”
Following a survey by union Unite, which saw 89% of respondents from the hospitality industry report that they had experienced one or more incidents of sexual harassment, the Labour leader also said he would introduce a raft of policies to protect workers.
Corbyn said legislation would include preventing contractual clauses which stop the disclosure of discrimination, harassment or victimisation, doubling the timeframe in which employment tribunals can be taken and requiring employers to publish their sexual harassment policies and the steps taken to enforce them.
UKHospitality has invited the Labour leader to meet with its representatives to discuss his suggestions.
Chief executive Kate Nicholls said: “Labour has unveiled plans to bolster equality for employees, but hospitality employers are already working hard to provide transparency and fairness for their workers.
“Clarity and transparency for staff and management alike regarding the collection of tips is welcome and UKHospitality has worked with Unite and sector representatives to establish that via a code of practice. Any legislation on tips needs to provide the stability that UKHospitality has pushed for so that all employers and employees understand the agreed tipping and tronc measures in place.
“Measures to address sexual harassment in the workplace are certainly welcome and there can be no place for it within hospitality or any other sector. UKHospitality has been engaging with employee organisations and the Health and Safety Executive to discuss workable solutions to safeguard hospitality staff, particularly those in potentially vulnerable roles.”
Corbyn has also reiterated Labour’s pledge to increase the minimum wage to £10 an hour. The plan was described as “laudable in theory” by UKHospitality as it warned the move could have the unintended effect of putting people out of work.
Nicholls added: “We would welcome a chance to discuss these measures with the Labour leader to see how we can secure support for the sector’s employees and the companies that employ them.”