As the hospitality industry faces a labour crunch threatening to bring it to its knees, bosses have said legislation to protect workers’ tips could help freshen its image.
Ministers have promised legal protections for employees’ tips since 2016. In a further blow, the Employment Bill, set to contain this framework, was scrapped from the Queen’s Speech earlier this week.
However, the department for business, energy and industrials (BEIS) was understood to still be keen for a rule-change.
It comes after firms like Pizza Express and Byron Burgers have received damning headlines in recent years after staff complained bosses had attempted to use a slice of tips to bolster kitchen staff pay.
Unsavoury headlines will do little to whet the appetite of job seekers considering the sector. Some 160,000 roles in pubs and restaurants are vacant, according to UKHospitality.
While bosses insisted to CityA.M. venues taking workers’ tips was not endemic, they said a legal framework would ensure staff were looked after.
“The problem is that, given a system not surrounded by legislation, there will be some businesses that will abuse it,” Sarah Willingham, boss of London-listed bar group Nightcap, told CityA.M.
“I do genuinely think across the industry the majority of people do the right thing. The problem is you just have some of these businesses that give us a bad name.”
For those working in bars and restaurants, money accrued from a service charge or tips can be “really significant” for individuals, adding a few pounds to their wage per hour.
Job applicants should ask potential employers how a service charge is dished out, Willingham added.
“That in itself would make a difference. It would make [those in recruitment positions] stop and realise that at a time where it’s so difficult to recruit and hard to retain, we really are looking after our staff, more than ever.”
Even before the pandemic and Brexit, hospitality has endured recruitment and retention struggles.
“So many people historically have seen hospitality as transient, something to pay through uni or before you get your ‘proper job’,” Willingham added.
“I have had a career my whole life from hospitality and now I am running a £40m business that floated on the London stock market last year. It is a proper job.”
Although hospitality has traditionally been seen as having a bad rap for low pay and exploitative practices, the Night Time Industries Association (NTIA’s) Michael Kill said the pandemic had changed perceptions.
“We saw owners looking after their staff to their own detriment,” he said. “I don’t think our industry has a perception of us treating staff unfairly in any shape or form,” he insisted.
What’s more, wages have soared in recent months amid a fight between hospitality bosses from a slimmer pool of workers.
Almost four in five bar and pub operators (79 per cent) had increased pay rates for staff in a bid to woo job applicants and satiate current staff, according to data from UKHospitality and CGA earlier this year.
Nevertheless, a lack of movement on the long-promised legislation was “very frustrating” for the sector, Kill said.
“A legislative platform would then eradicate any position where the industry can be brought into question,” he added.
The absence of haste on the matter comes as staff are “reliant” on tips, even more so in an environment where living costs are soaring at historic records, Kill added.
“Workers should absolutely get the tips they deserve, and customers should have reassurance that their money is rewarding staff for their hard work and good service,” a government spokesperson told CityA.M. when quizzed on the future of the muted legislation.
“It’s important that this legislation is looked into, as has been promised for years, to ensure the equal treatment of hospitality workers across the industry,” Clement Ogbonnaya, owner of the Prince of Peckham, told CityA.M.
“We ensure that gratuity is shared equally among all our staff but know that this is not always the case with all hospitality businesses,” the pub operator added.
Under rules promised last autumn, ministers said simply that it would be made a requirement for employers to pass on tips to workers without deductions.
However, operators themselves are divided about how a service charge should be dished out between workers.
Charles Tyler, owner of the Paladar restaurant in Elephant & Castle, said ministers may be right to postpone plans if “more time to think in detail” was needed to create a level playing field.
Government hesitancy and u-turns on the issue had resulted in a system “clouded in mystery,” with many in the sector reluctant to discuss it, Tyler said.
The restaurateur spoke in favour of the French service compris system, where venues typically add 15 per cent to the bill, leaving diners free to tip workers after especially good service.
“Is service just who serves you at the table or is it everybody, surely, that makes the service aspect?”
“The kitchen porter is just as important as the server, the head chef and maybe even the general manager. They’re all important,” he said.