Restaurants face ban on taking share of tips

Restaurants will be legally barred from keeping tips from staff under plans to be announced by Theresa May on Monday.

The move follows a public outcry in 2015, when it emerged that many High Street chains routinely took up to 10% of tips paid by credit and debit card.

Most chains have since stopped this practice, typically charging a much lower fee of 2.5% on tips paid by card.

The hospitality trade body said the fact restaurants had acted voluntarily meant new legislation was unnecessary.

“We developed a Code of Practice – together with Unite – which deals with the fair distribution of tips among all staff, not just waiters,” said UK Hospitality chief executive Kate Nicholls.

“As a result, best practice has been promoted across the sector and we see no evidence of tips being withheld across restaurant chains.”

Ms Nicholls also said smaller restaurants may need to retain “a small amount” from card tips to cover “the not inconsiderable costs of credit card charges and processing payments”.

Labour said the government’s move had copied another of its policies, which the party announced in June.

Jeremy Corbyn had said a Labour government would legislate to ensure workers keep 100% of their tips.

Mrs May said the “tough” legislation, which would apply in England, Scotland and Wales, was part of the government’s push to end exploitative employment practices.

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In 2016, Sajid Javid, then Business Secretary, said tips should go in full to waiting staff and announced proposals to stop employer deductions from them, but stopped short of legislating.

A government spokesperson was unable to say whether the legislation would also cover the practice of customer tips left for waiting staff being redistributed to include back of house staff such as cooks and kitchen workers.

Workers at TGI Fridays outlets held a series of strikes earlier this year over a new pay policy that redistributes customer tips from waiters to kitchen staff.

There are about 150,000 hotels, pubs and restaurants in the UK, employing about two million people.

Unite regional officer Dave Turnbull said cracking down on tipping abuses was long overdue and the union would seek assurances that the legislation truly delivered fair tips.

“There will be question marks as to whether it will deal with the myriad of scams some restaurants use to pilfer staff tips to boost their profits, in addition to dealing with unjust situation at TGI Fridays, who use tips left for waiting staff to subsidise the low wages of skilled kitchen staff,” he said.

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