Unite slams tipping law over ‘loopholes’
Trade union Unite is urging the UK government to strengthen tipping legislation, claiming hospitality employers are exploiting loopholes in the law.
Unite has launched its Fair Tips, Fair Pay campaign to call on the government to toughen the current Employment (Allocation of Tips) Act, which came into force on 1 October 2024.
The new rules made it unlawful for employers to withhold tips and service charges from staff and claimed to protect more than two million hospitality workers.
The legislation states employers must: allocate tips fairly and transparently; have a written policy on how tips are allocated to workers; and distribute 100% of tips to workers by the end of the month following the one during which they were received.
However, Unite has founded several ways that ‘unscrupulous’ employers are holding on to gratuities. These include third-party deductions, with some employers using platforms such as TipJar, which take administration fees from tips.
Unite said some employers still treat service charges as company income rather than distributing them as tips.
‘Fight for fair tips far from over’
Unite general secretary Sharon Graham said: “When this act came into force, it was presented as a landmark win for hospitality workers. It promised to end the days when employers could dip into tips meant for staff and was welcomed by Unite and our members in the industry.
“Yet, a year on it’s clear the act has left loopholes that employers continue to exploit – meaning the fight for fair tips is far from over. Labour must act now to protect hospitality workers who undoubtedly feel betrayed by this law.”
Unite believes the legislation’s pay out of tips after up to a month is far too long for workers in “low-paid, insecure jobs who need immediate access to their earnings”.
Through the new Fair Tips, Fair Pay campaign, Unite is calling on the government to introduce several provisions to the law, such as fines and penalties for employers breaking the law.
Other measures include bringing in a ban on all deductions, such as admin fees and employers ‘skimming’ gratuities.
Unite is also asking for a statutory right for workers to elect tronc masters and committees, with clear protections against employer interference. A tronc is a central pool for payments made to employees at work.
It is also calling for real-time transparency, whereby tips must be itemised and paid with wages, instead of weeks later, and stronger legal rights for unions to access workplaces and gain recognition in sectors where tips are being pocketed by employers.
Furthermore, Unite urges the need for unions to have collective enforcement rights, allowing them to bring claims on behalf of groups of workers.
Unite hospitality lead organiser Bryan Simpson added: “The first year of this act has shown that legislation on paper is never enough. Since it came into force, employers have adapted, using new mechanisms to deduct from and maintain control over tips.”
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