Michael Challenges PM On Tips Law.

Michael Connarty challenges the PM to implement tips law fully at PMQ's.

The Unite The Union campaign for ‘fair tips’ for hospitality workers reached the Prime Minister today (Wednesday 24^th November) as he was challenged by Michael Connarty at Prime Ministers Questions (PMQ’s) to hold a review of the working of the law on tips and the voluntary code of practice on tips set up by the last government.The MP for Linlithgow and East Falkirk Constituency who campaigned successfully with the UNITE Hospitality section for the change in the law to stop tips being used to pay the Minimum Wage, called on David Cameron think again on his Government’s plans to abandon the 12 month review of the Tips Code of Practice.

Following his question (at Number One) in this week’s PMQ’s Michael Connarty said: “There was a cross party consensus to change the Law to ensure 100% of customer’s tips went to staff in the hospitality industry on top of at least the Minimum Wage. It is now clear that some large chains of restaurants and hotels are saying they have a ‘Tronc or Kitty’ system to avoid paying National Insurance, and also ripping off between 8% and 14% of their employee’s tips in the process. Good employers are being shamed by the rip-off employers who still think their hard working staff are there to be cheated out of their customer’s tips, and the Law is there to be avoided.”

Dave Turnbull, Unite officer said: “Workers expected their employers to hear the demands of consumers last year to pass all the money they intended for staff to them, instead many businesses have chosen to continue business as usual and profit from the gratuity charges. The Government must now act to implement the review of the Tips Code that was committed to in order to hold this industry to account, it has been a total failure."Of major concern to Unite members working as waiting staff is the number well known high street brand name restaurant chains who seem to be manipulating the Inland Revenue rules to their own benefit while effectively retaining control over the distribution of staff tips. Many of these chains add insult to injury by charging a levy against staff and customers to cover the alleged costs of administering tips through the payroll."For the Government to refuse to honour the commitment to a twelve month review of the voluntary tips code of practice could mean that issues such as this remain unaddressed.”

The concerns about the abuses of the TRONC systems are:

- The Inland Revenue guidance (E24) states that where the distribution of tips is controlled independently by staff,National Insurance Contributions (11% for staff and 12.8% for employers) are not payable on tips subsequently administered through the payroll. However, Unite believes many of the schemes registered for this purpose are not ‘”controlled independently by staff “ and NOT truly independent of the employer.

- A number of restaurant chains are charging staff between 8% and 17% of their weekly tip income as an admin fee for so called “ business costs” yet chains of a similar size to these manage to distribute tips at no charge at all to staff. Very few chains are being open about this in line with the provisions of the Voluntary Code of Practice.

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