It is a pleasure to follow my hon. Friend the Member for Watford (Dean Russell), who has been such a pivotal architect of this Bill. I congratulate my hon. Friend the Member for Ynys Môn (Virginia Crosbie) on taking this Bill on and getting it to this stage, and on being such a powerful advocate for it and for the people who will benefit from it. I also wish to recognise the work of my hon. Friend the Member for Watford, who had originally introduced the Bill to the House; a lot of this work was done previously by him as well, and this really has been a great double act. I was pleased to support the Bill on Second Reading and through its Committee stage.
The Bill supports our Government’s commitment to ensuring fairness for workers by ensuring that tips are fairly distributed. Although many good employers ensure that staff receive their fair share of tips and are open about that sharing, we know that that is not always the case. As I have previously mentioned in the House, many constituents got in touch with me about this, reporting that they had as much as 15% of their tips removed from their pay packet. Often, they simply were not aware of how much was being taken away from their pay packet, because often customers leave a tip on a card. Whether customers leave a tip and how much they leave is determined in large part by the quality of service provided, and we want to be assured that these tips go to the person who provided that service. As has been said, this is not a part of their wage; it is an extra, a thank you, a recognition for the service. Many customers will not give a tip, or they will give a lower tip, if the service they get is not that great. People want to know that whatever they give goes to the person who has given them the service in the first place.
As has been mentioned, many people are concerned about how they go about leaving a tip; they wonder whether they should leave cash. When they have had a great meal or great service, is it better to give the person cash? We all rightly ask, “Will you get this in full?” Many people will just add the tip on to their card payment when the bill comes; this has become commonplace, and indeed I am astounded by how few people now carry cash around in their pockets. Many people are understandably distrustful whether a tip left by card will reach the intended employee in full. Indeed, my hon. Friend the Member for Watford noted on Second Reading that there is no guarantee that the person or team they gave it to will receive it. For employees, tips by card are less visible and they are difficult to track or claim.
That is the world we are in and so navigating it and making things work is part of our job. This Bill will put an end to these concerns, by amending the Employment Rights Act 1996 to place a legal obligation on employers to ensure not only that tips, gratuities and service charges
are distributed to staff, but that that is done in full, without deductions, when these things are being distributed by the employer or via a tronc system. An interesting point was raised by my hon. Friend when he talked about the system by which these tips are distributed: what does that “12.5% service charge” really mean? Where is it going to go? Perhaps we should put into the minds of the hospitality industry the idea that they should set out whether they are running a tronc system and note, next to where the “12.5% service charge” is specified, “This will be distributed and given directly to the people who have provided the service to you today.”
As has been mentioned, we know that covid was a difficult time for the hospitality businesses, but many of them have bounced back well. Some in my constituency have even flourished. That is often in large part due to members of staff providing great service, combined with the loyalty of their customers. Tips help to show workers that their good service is valued and appreciated, and customers should be able to show this appreciation with confidence. Although we should not need a law that obliges employers to allocate all tips, gratuities and service charges without deductions, sadly it is very clear that we do.
We have not yet spoken in detail about the other areas where the Bill will apply, such as the beauty industry. This is often an overlooked area. We tend to talk about tips and tipping from the point of view of hospitality, restaurants, pubs and bars, but many people who work in nail bars and other venues are left tips. It is great to know that they will keep their tips, too. I encourage the Minister to back up the Bill with sound outreach for media coverage.
I welcome this Bill. I congratulate my hon. Friend the Member for Ynys Môn on moving Third Reading, as the Bill will make a welcome change. I hope and believe it will receive cross-party support.
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