Opinion: there are both big wins for employees and glaring omissions in the Government's new bill aimed at the hospitality sector
The Payment of Wages (Amendment) Bill was published this week by Tánaiste Leo Varadkar. This is a welcome development and one that has been sought by hospitality worker advocates for quite some time. In devising a new piece of employment law, the Government should balance the needs of workers with those of employers.
By its nature, employment law tends to weight its protections on the side of workers as the weaker party (although by no means 'weak') in the relationship. However, State ideology also plays a critical role. Under a neo-liberal ideology, for example, employer/business needs are given paramount and, in some cases, are the only consideration.
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From RTÉ Six One News in December 2018, over a third of hospitality workers in Galway feel they are not receiving tips
In recent years, research suggests that hospitality workers don’t always receive tips intended for them by customers. The Unite trade union has produced data on this (50% do not receive their tips and are unaware of practices in their workplace; they therefore have no control over where their tips go).
My own research which indicated tips being withheld by the employer in whole or part constituted the lived experience of around 25% of workers surveyed. However, the existing research evidence in this topic is limited and the Tánaiste’s comment that "the vast majority of employers do their best to ensure tips are distributed fairly among staff" is highly questionable.
When the Tánaiste first suggested that he was intending to introduce a tips bill, I contacted his office with one request, that hospitality workers be consulted on the detail as the primary authority on what actually happens to these tips. To be fair, consulting hospitality workers does pose a challenge. Leaving aside the fact that the constitutional right to join a union often eludes these workers, the reality is that less than 6% of them are actually organised under a trade union, so who does one consult on their behalf?
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From RTÉ Radio 1's Beo ar Éigean, Áine, Siún and Sinéad on who and when do we tip?
Having offered to share the indirect voice of workers collected through my research, I was invited to present an informed opinion to officials charged with drafting the legislation. Julia Marciniak and colleagues from UNITE received a similar and separate invite.
After consulation with an expert legal advisor on the technical details, some of my key points of question/argument were as follows:
(i) Tips are an important supplement to low wages of hospitality workers. In Ireland, 43% of minimum wage workers are employed in the accommodation, food, wholesale or retail sectors, which is higher than any of the other countries studied.
(ii) The main recipients (or not) of tips are frontline hospitality workers. If the issue is that tips may be withheld (and there is some evidence to support this), the likely withholder is the employer. Yet employer representatives have been afforded a voice in the drafting of this law, while workers have not. It is in the employer’s interest, in my opinion, for this law to be as weak as possible.
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From RTÉ Radio 1's Today with Sean O'Rourke in 2019, former water James Larkin and restaurant owner Gina Murphy on restaurant tipping
(iii) The draft bill proposes the distribution of electronic tips in a ‘fair, transparent, and equitable manner’. This is subject to the interpretation of the employer who holds them. Why must the employer have control of the determination of ‘fairness’ and ‘equity’?
(iv) How will the Bill address the issue of service charges? A service charge is an amount that is added to your bill in a restaurant to pay for the work of the person who comes and serves you. Customers may well assume that a service charge goes to those who ‘serve’ and therefore overrides the need to leave a tip. When did it become accepted here that service charges are the prerogative of the employer and why?
Cash tips were not covered on the original draft, but this was amended after submissions.
In my opinion, the term 'service charge' should be replaced with the more accurate term ‘additional employer charge’
Fom my perspective, the big win is that this Bill provides employees with a legal right of ownership of tips customers intended and assumed would go to them.
The biggest omission, however, relates to service charges. One of the five stated purposes of this bill is to ‘leave the status quo in relation to mandatory service charges forming part of the revenue of a business.’ This is a big concession to employer representatives who stated at an Oireactas Committee hearing that service charges. This represents a loss to workers, as customers may reasonably interpret the service charge as a tip intended for them.
In my opinion, the term ‘service charge’ should be replaced with the more accurate term ‘additional employer charge’. That leaves those of us who care with the task of alerting hospitality customers as to the true nature and legal standing of service charges.
In conclusion, the Bill is to be welcomed in giving workers a legal right to their tips. But there is still a job of work to be done in addressing other challenges faced by hospitality workers and in highlighting the good practices adopted by some employers, who have the capacity to lead by example from within the sector.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ
