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Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Workers' tips and gratuities

Summary

Deputy Joan Collins raises continued theft of tips in restaurants and asks for clarity on legal protections. The Minister says the Low Pay Commission and WRC are examining the issue and that a sectoral agreement or code of practice could make protections enforceable.

There are many serious and important issues to be raised here today and I want to raise again the issue of workers' rights. This is the first opportunity to do so since May Day or International Workers' Day last Wednesday. I contacted the Minister for Employment Affairs and Social Protection in advance to make her aware that I would ask this question and seek clarity. On 7 March last, when I raised the issue of the theft of workers' tips by management in the Ivy restaurant down the road from this House in Dawson Street, the Tánaiste told the Dáil that this practice is "illegal". He said clearly:

Any employer that calculates salary and includes tips in that figure is acting illegally. This cannot be done ... Tips are separate to salary and if there are issues that the Government needs to act on there, then we will look at that closely.

We now know that it is not illegal. The Minister has clarified that, as has Unite the Union. I ask that the Dáil record be corrected in this regard, although I accept that the Tánaiste gave his view in good faith, based on his and my dismay that such a practice could happen and was happening.

When will the Government enact emergency legislation to close the loophole and to make this disgraceful practice unlawful, as the Tánaiste believed it was and as it certainly should be? On the weekend of 6 April, The Ivy restaurant, possibly on legal advice, changed its policy of applying a service charge to tables or five or more to include all tables. It also removed the option to pay a tip via credit card from the payment machine. Customers believe that this service charge goes to waiting staff and back-room staff but it does not. Service charges are discretionary. If customers are happy with their server, they should always pay him or her in cash. This area has to be legislated for immediately.

In recent days another large employer, Peter Mark, imposed a new training fee on its trainees. It did this explicitly to recoup from trainees the benefits lost due to the abolition of training rates to low-paid workers following the Government's much trumpeted and very welcome enactment of the Employment (Miscellaneous Provisions) Act 2018. This matter has been highlighted by Unite the Union, which has written to the Minister for Employment Affairs and Social Protection. Will the Minister, Deputy Bruton, make a statement on this matter? Can we be told what steps will be taken to ensure that legislation will be passed to the benefit of these low-paid workers?

I have asked three questions. When does the Government and the Minister intend to bring in emergency legislation to close the loophole with regard to low-paid workers not receiving service charges and tips from customers? Has Revenue or the Workplace Relations Commission, WRC, investigated The Ivy restaurant or other restaurants whose actions have recently been highlighted in the media, such as the Hard Rock Cafe? On the matter of trainee hairdressers in Peter Mark, what legislative steps will be taken to prohibit employers from such behaviour?

Comment on this

I may not be able to answer all of the questions the Deputy has asked. It is my understanding that the Low Pay Commission, which is an independent body, has been asked to look at this issue. It produced a report on the matter of tips and gratuities. It met representatives of the adjudication and inspection divisions of the Workplace Relations Commission last year. The WRC has stated that, in its view, a better approach than the proposed legislation would be to introduce a code of practice on tipping. Such a code could set out the principles underpinning such legislation and enshrine the proposal that an establishment display to its customers how tips are distributed. The Low Pay Commission considered all of that evidence and it is its belief that there are not sufficient reliable data to prove that the issue of employers withholding employee tips is a significant problem. The commission does not believe that legislation or regulation should be introduced in this area as the administrative and compliance costs involved would not be justified. The commission is also concerned that there could be unintended negative consequences. It considers that legislation in this area may not be enforceable.

An evaluation has been done. The Minister will have to explore the issue further if the Deputy submits further evidence, but she remains of the view that the Low Pay Commission's report and its findings should inform the debate on this issue and provide guidance as to possible solutions. The Minister is present but she is not in a position to answer additional questions at this point. She will listen to the Deputy's comments and, should additional responses be required, we will make them available to the Deputy.

Comment on this

A survey on this issue has been carried out on restaurants in Galway and it has been proven that this practice goes on quite regularly. Senator Gavan produced that survey. Information is also available in respect of The Ivy restaurant; the Minister will have seen the payslips. There have also been reports in the media in respect of the Hard Rock Cafe and other restaurants and retailers who engage in this practice. This is a very low practice involving employers being very greedy and taking money from the hands of their workers who are trying to make a living. They are low-paid workers who get up early every single morning, who work late every single night, and who stand on their feet all day. This House and the Government should be protecting these workers as best we can.

The Minister spoke about a code of practice. Is he looking at bringing in a statutory instrument with regard to tips? Businesses could also be banned from adding a service charge or forced to make it clear that the charge is discretionary. The Minister should look at those angles. He did not answer the question regarding Peter Mark.

Comment on this

To take up the Deputy's point, there is no doubt that if the Minister can secure a sectoral agreement it will have the force of law. Under law, if such an agreement can be put together it will be enforceable. That would be the ideal outcome. The Minister is working to secure such an agreement. She has also indicated that she is writing to companies, including that which the Deputy mentioned, in which practices which are not in accord with a proper approach to this issue may be in place. It is to be hoped that by alerting companies to their obligations and securing an agreement which can become a sectoral norm which would be enforceable, we can deal with this issue. That would be the ideal outcome, rather than specifying in primary legislation individual practices which evolve and change. An instrument that has the involvement of all sides in industry and which is capable of being kept up to date as circumstances change is required. That is the goal the Minister seeks to achieve.

Comment on this