‘Action has been taken on tipping and legislation could be costly'

24 July 2018 by
‘Action has been taken on tipping and legislation could be costly'

Unfair tipping practices "represent a tiny minority" and government legislation that involves added costs could simply increase pressure on vulnerable businesses, an expert has said.

Peter Davies, managing director of WMT accountants and adviser to hospitality businesses, told The Caterer: "We've seen some high-profile examples of businesses that have changed their working practices," referring to brands such as PizzaExpress, Prezzo and Côte.

His comments came after a Freedom of Information Act request, seen by the Independent newspaper, suggested that the Department for Business, Enterprise and Industrial Strategy (BEIS) had not started work on a response to the consultation which concluded in 2016.

The apparent revelation that the department does not hold a draft response has prompted claims it has dropped plans to take further action.

But he said that regardless of this there has been evidence of movement within the sector towards meeting the government's previously stated objectives.

He added: "The reality of the situation is that the overwhelming majority of businesses act in a way that most reasonable people would consider is fair.

"Legislation would ensure a level playing field but the danger is that if it's not well thought-out you get into the law of unintended consequences, and the financial costs of that could be very significant. There will be some businesses for whom one more straw and the camel's back will break, and that's not going to help anybody - staff, consumers or businesses."

A BEIS spokesperson said: "Workers should be paid fairly for the job they do, that includes getting the tips they have worked hard for. We have seen restaurants abandoning unfair tipping practices after government consultation and media scrutiny.

"However, we've not ruled out taking action if restaurants don't pay their staff fairly, including bringing in new laws if necessary."

Davies said businesses should ensure they can deliver consumers a clear message, be it that they use a tronc system, give all tips to their staff, or 95% following bank charges, to improve the industry's reputation.

Chief executive of UKHospitality Kate Nicholls agreed that action had been taken within the industry. She said: "UKHospitality responded to the government's consultation on tipping in 2016 and has produced guidance for its members on establishing transparent and fair tronc systems that ensure staff receive their tips and tax is collected appropriately.

"It is important to note that we have still seen no widespread evidence of malpractice or misuse of tipping practices among our membership. UKHospitality will continue to provide guidance to its members to ensure that hard working staff receive the tips they deserve"

Labour leader Jeremy Corbyn has pledged to introduce legislation that would ensure hospitality staff keep 100% of their tips if his party is elected.

Jeremy Corbyn pledges new laws to ensure staff keep 100% of tips >>

Workers at two TGI Fridays sites to walk out in 24-hour strike >>

New code of practice on tipping launched >>

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