Employment (Allocation of Tips)

Baroness Winterton of Doncaster Excerpts

Tuesday 14th May 2024 Commons Chamber

[Dean Russell]

My hon. Friend makes an incredibly important point, which gets to the heart of this: the fairness here is to not just the workers, but the businesses. Most businesses do the right thing and pay a decent salary. The Minister can correct me on this, but I believe that legislation taken through a while ago means that tips cannot form part of a salary. So businesses should be paying a decent wage. When some organisations do the wrong thing, what they are doing is anti-competitive; they are making profit off the backs of their workers by keeping their tips, and the businesses doing the right thing in giving 100% of the tips to the staff are less competitive. My approach is therefore far fairer to the majority of businesses that do the right thing, and to the workers. It is also far fairer to the customers, who thought that the money was going to the staff and did not realise that a percentage of it, or in some instances all of it, was being taken from them.

My Bill will ensure fairness—that is the key word we should all take from the Bill and from today’s debate. It will ensure that all tips, 100% of them, are paid to staff. Agency staff will be included in that; when I originally talked about this Bill, some had a concern about a two-tier system for workers. The Bill will also ensure that a policy is in place—a code of practice—so that businesses ensure that their staff know where they stand. Businesses will be able to be clear with everyone who works for them how the tipping practice will work; I will not go through the full list, as the Minister did an excellent job of listing it earlier.

This measure has been a journey. I mentioned my work on the Bill with my hon. Friend the Member for Ynys Môn, but, as with all journeys, I began this trek much earlier. In many ways, this began with the fantastic work done by my right hon. Friend the Member for Bromsgrove (Sir Sajid Javid) when he was a Secretary of State. He put in place the work enabling the Government to look at how we could make sure tipping was fair, so this measure is built on the shoulders of giants. I will not list them now, but many Members have been involved in making sure my Bill came to fruition. Many organisations were also involved, and I thank UKHospitality, especially Kate Nicholls, who has done a fantastic job; and the Night Time Industries Association, which has done brilliant work. Conservative Members do not often talk positively about unions, but the GMB has done fantastic work, and I should give another mention to ACAS. Lots of businesses, employers and employees have also really pushed for this to come to fruition.

I want to thank some current and former members of the Government, particularly my hon. Friend the Member for Sutton and Cheam (Paul Scully), who was incredibly supportive when I originally tried to bring my legislation in as a presentation Bill. At the time, we were going to make it part of the Employment Bill. Unfortunately, that did not happen, but many of the policies that were going to be included did happen through various other routes. I thank my hon. Friend the Member for Loughborough (Jane Hunt), who was a fantastic supporter and an able Minister.

Of course, I also thank the Minister before us today and his team. He has been excellent in making sure that this is pushed forward and, through him, I would like to thank his team. Some of them were my team in my short time as a Minister, so I know the passion they had about making sure that we got this right. During my brief time as a Minister, I had to hand over this precious baby of mine, the tips Bill, to a colleague to make sure we could keep it moving forward through the House. That was when I was able to speak to my hon. Friend the Member for Ynys Môn, who has an incredibly important hospitality industry in her constituency. I could not think of someone more able and more energetic to make sure that we got the Bill through. Through her work and our work with Lord Robathan, we made sure that it got through and received Royal Assent. Many Members will not know that on the day it was given, I was fortunate enough to meet the King that morning in Parliament—I am sure that is a rare story and one for a pub quiz sometime in the future.

The other person I would like to give a huge thanks to is the lady who rarely gets a mention in here but who is behind so many of these incredibly important Bills: my hon. Friend the Member for Castle Point (Rebecca Harris). She does an incredible job in giving us guidance on how to navigate the complex system of getting a Bill through Parliament and in giving us confidence that it is possible. She has made sure that many Bills have got through and gone on this incredibly important journey, including many others in which I have had involvement in different ways, such as those on flexible working, maternity care, leave and so on.

My Bill will help about 2 million hospitality workers across the UK. That is an incredible number. When I have spoken about this to people around the House or to my constituents, I have found that so many more people will talk about its importance: customers who want to make sure that money for which they have worked hard and which they are giving as a thank you gets to the people they are giving it to; and colleagues who have family members who work as waiters or waitresses, or who work in bars, as this will make sure that they get the money that has been gifted to them. Many colleagues have spoken to me about their experiences of working in hospitality while at university or when they were younger. That has shown me how the hospitality sector plays an important role in our society: it provides a type of apprenticeship to many of us before our careers. We learn a lot about our culture, society and community, as well as about people, through hospitality. That is why I have been so passionate about saving our night-time economy, including music venues, in Watford and across the UK. Music venues have been at the heart of our society and I fear they may be damaged in the future, but I hope the Bill may play a small part in helping them.

The Bill is also about fairness. It is impossible to legislate for fairness in society—it is a gut feel—but fairness is at the heart of what it is to be British. We believe in fairness in all parts of our society. At its heart, the legislation goes back to the fact that when someone gives money as a gift to someone else, they expect them to get it. That is what this Bill will ensure, and I am grateful to the Government for that.

I want to raise a couple of related points with the Minister to ensure they are covered as the legislation moves forward. We need to ensure there is a communications strategy before October so that workers know their rights, how to access them and what is covered. Businesses also need to know that the legislation will not be a burden. During the early stages of the Bill, I was mindful that it must not be a burden and more red tape for businesses. The majority of businesses get that and understand it. Those that were doing the wrong thing will, no doubt, kick up a fuss. Over the coming weeks and months, we will probably hear about businesses trying to get around the regulations by forming new practices. I hope the Government will clamp down on those, and name and shame the businesses involved; I will certainly be happy to do that to ensure that fairness is the heart of the regulations.

The Government have a role to play in supporting the hospitality sector as a whole as best they can. Businesses in the sector are important parts of our communities; they are in the heart of every village, town and city. Hospitality is often the reason people visit an area, it is often the first port of call for a job and a career, and it plays an important role in entertainment and culture. No other industry has such an important and broad role, so I want to ensure it is fair. I thank the Government, the Minister and colleagues across the House who have been incredibly supportive, especially my hon. Friend the Member for Ynys Môn. Finally, may I say a huge thank you to my constituents in Watford? If they had not put me here, the Bill may not have been making progress today.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the spokesperson for the Scottish National party.

--- Later in debate ---

[David Linden]

I am absolutely willing to acknowledge that some recommendations from the Taylor review have been progressed, but no significant action has been forthcoming. A lot of MPs have said that; indeed, even the hon. Member for Watford said it was regrettable that there was not an employment Bill. I am simply pointing out the fact that an employment Bill was promised in this Parliament. We found time to legislate on a whole manner of other issues, some of which have, frankly, been with a view to creating a wedge at the general election, whereas we know that the legislation framework we have around employment law is not necessarily fit for the 21st century and the kind of economy we now have.

The UK exited the European Union in January 2020 to the cheers and trumpets of Brexiteers who promised that Britannia unchained from Brussels would lead to an improvement in workers’ rights. In reality, and from what I can see in Glasgow, all that has happened is that employers in the hospitality and tourism sectors now just have fewer workers.

In citing the briefing from Unite, I want to thank it for the work it has done to engage with employees and to gauge their opinions about tipping policy. For context, those who have responded are already engaged trade unionists with a track record of activism and a decent understanding of policy. That is what makes the answers particularly striking. When asking whether an employee’s workplace passed on all tips to its staff the answers were: yes, 63%; don’t know, 21%; no, 11%; and some 5% indicated that tips were only accepted by card on an employer-operated tronc that employees paid tax on. Those statistics paint a picture of the sheer scale of the issues workers face, especially when it comes to tipping in hospitality.

On tipping policy, some other issues need to be ironed out and considered further, namely whether backroom staff, such as those who are integral to preparing and producing a meal, not just delivering it to the table, be tipped, and whether the tips are being distributed equitably. All workers need to be eligible to receive tips, whether they are on a zero-hours contract or are permanent. Progress has been made on extending tips to agency workers, but in reality we now operate in a gig economy. It is vital that the legislative framework that comes from this place reflects that.

From the Government’s response to the consultation, 40% of employers admit that they do not issue tips to agency workers despite that being an obligation under section 27H of the Employment Rights Act 1996. The hon. Member for Watford was spot on when he said that the comms to employers and employees must be very clear in the run-up to October this year. There must be something that can be done, for example, with employees who still receive a payslip. Could the Government bring forward measures to require all employers to put some sort of small note on payslips to make clear that the laws on tipping will change in a couple of months?

The legislation we are piloting through the House today makes the point that our legislative framework does not reflect the reality of the UK economy and labour force in 2024. More needs to be done to protect workers, especially those on zero-hours contracts. Arguably, that point should weigh heavily on the minds of shadow Ministers who, if polls are to be believed, might shortly be assuming red boxes and Whitehall offices in the coming months.

As we approach the cigarette end of this Parliament, attention turns to the incoming Government and their ambitions for workers’ rights. It would be fair to say that the small c conservative approach to workers’ rights from the official Opposition has not necessarily been wholly welcomed by those in the Labour movement. Only last week, Unite’s general secretary, Sharon Graham, was on record as saying:

“It looks like all the warnings Unite made earlier about the dangers of Labour rowing back on its pledges for the New Deal for Workers have been proved right. This new Labour document on the New Deal, issued to the unions on Monday, is a row back on a row back. It is totally unrecognisable from the original proposals produced with the unions. Unrecognisable. Workers will see through this and mark this retreat after retreat as a betrayal. This new document is turning what was a real new deal for workers into a charter for bad bosses. Labour don't want a law against fire and rehire and they are effectively ripping up the promise of legislation on a new deal for workers in its first 100 days.”

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I assume the hon. Gentleman will be coming back to the motion before us.

[David Linden]

I am very happy to inform you, Madam Deputy Speaker, that I am talking on employment legislation, which I believe is germane to this debate.

Unite’s general secretary goes on to say:

“Instead, we have codes of conduct and pledges of consultation with big business. Likewise, the proposal to legislate against zero hours contracts is watered down to almost nothing…In truth this new document is not worthy of discussion. All unions must now demand that Labour changes course and puts the original New Deal for Workers back on the table.”

That was a warning shot to the Labour party that it, too, must be more ambitious and not leave the task of protecting workers’ rights to the valiant efforts of Back-Bench MPs who happen to be lucky in the private Members’ Bill draw.

I am sure that you will be glad to know, Madam Deputy Speaker, that I will draw my remarks to a close, and say, yes, the measures before us today have the potential to put up to £200 million a year back into the pockets of hospitality staff and could benefit more than 2 million workers across the hospitality, leisure and service sectors.

That is a legislative achievement to be rightly celebrated in this place but it comes against a backdrop of increasing legislation that restricts the rights of trade unions to exercise functions of collective bargaining. It is no surprise, therefore, that the UK now has some of the most restrictive trade union laws in western Europe—something that has worsened over the past decade. Workers deserve better, and today is another baby step to improving things, but it largely goes against the grain of Westminster policy formulation when it comes to workers’ rights. And it is frankly little wonder that the Labour movement in Scotland, so ably represented by the Scottish Trades Union Congress, has now concluded that legislative competence for employment law should be devolved to Scottish Ministers. Failure to do so—be that by Labour or the Tories—will lead Scots to conclude one thing and one thing only: that Westminster is not working for working people.