Employment (Allocation of Tips)

David Linden Excerpts

Tuesday 14th May 2024 Commons Chamber

[David Linden (Glasgow East) (SNP)]

It is genuinely a pleasure to follow the hon. Member for Watford (Dean Russell). I thank him and congratulate him on the private Member’s Bill that led to this code of practice coming to the Floor of the House. It is a small but significant step forward in improving workers’ rights. Regardless of our political differences—I suspect there are many—I have always found the hon. Gentleman to be kind, thoughtful and dedicated to public service, and I am very grateful for that. It is therefore no surprise that having won the equivalent of the parliamentary lottery, he chose to bring forward legislation that commands such cross-party support, and I thank him for that.

I will make reference to the briefing issued by Unite the union later in my remarks, but at the outset I declare my own membership of Unite, although I should be clear that I have no particular financial interests to declare.

One of the most frustrating aspects of the 2019 to 2024 Parliament has been the lack of significant progress on improving employment law more generally. Yes, there have been piecemeal bits of legislation, such as the Bills brought forward by the hon. Member for Watford, my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) and the hon. Member for North East Fife (Wendy Chamberlain), but they have all come forward as limited Back-Bench Bills. It is undeniable that a vacuum was created for these private Members’ Bills to move forward due to the sheer absence of the substantial Government employment Bill that many of us expected. Indeed, we were promised such a Bill on no less than 20 occasions by Ministers. It is now seven years since the Taylor review and still no action has been forthcoming from the recommendations of that report.

[Kevin Hollinrake]

I am sure the hon. Gentleman would like to correct the record. A number of recommendations in the Taylor review have been implemented, not least the right to request predictable terms and conditions, which went further than the recommendations in the review. Will the hon. Gentleman acknowledge that fact?

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[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.

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[Kevin Hollinrake]

I thank hon. Members for their contributions to this debate in which we are seeking to ensure that the draft code of practice on fair and transparent distribution of tips is approved.

I will turn now to the specific issues raised. The shadow Minister talked about engaging with the sector, which is very important. I can tell him that we engage regularly with organisations such as UK Hospitality, the British Beer and Pub Association and the British Institute of Innkeeping on these matters and have been doing so for many months, as we want to make sure that their views are heard. The non-statutory guidance that we will be bringing forward should provide more help for those organisations to comply with the important provisions of this legislation.

The shadow Minister asked whether we would review the policy on a regular basis. We will obviously keep all these matters under review, and the guidance should help to inform the sector about requirements in terms of both employees and businesses. It is hugely important that we do so. He asked whether a person could take a claim forward to an employment tribunal for unfair dismissal. Clearly, employment tribunals are there to ensure that workers can assert their rights if they feel that their rights have not been respected, so we would definitely expect an employment tribunal to hear such a case.

The shadow Minister asked about tipping by digital apps. We see this as a new phenomenon and an interesting development, enabling the customer to be able to tip an individual using an app, QR code or whatever, and we will not stand in the way of that. Where a tip has been given directly to a member of staff, it is clear that that tip should be kept by the member of staff. The app is there to allow flexibility in the implementation of the code or the guidance, rather than allowing businesses to avoid their clear obligations.

The shadow Minister asked about payments and why they are paid the following month. I think it is reasonable to allow a business to be able to calculate the amount of tips that are received in a month and then pay those out to workers in the month following. We think that that is a reasonable balance to strike. He asks why we are taking another five months to put this legislation in place. Clearly, we want to ensure two things—that we get this right and that we respect some of the pressures that exist in the hospitality sector, which has been through a difficult time, with increases in the national living wage, the cost of living crisis and the covid pandemic. We are trying to make sure that we take the sector with us, rather than impose unfair new burdens on it. We do not think that these measures are unfair, because we know that the majority of businesses would adopt these kind of rules even without this legislation.

The hon. Member for Glasgow East (David Linden) seemed to imply that we on the Conservative Benches were going to use Brexit to improve workers’ rights. I am always keen to improve workers’ rights, and we have done so in this Parliament, but I remember his party clearly saying that Brexit would be a bonfire of workers’ rights and that certainly has not been the case.

[David Linden]

Does the Minister consider that workers’ rights have improved? If he does, why is it that trade union organisations across Europe recognise that the UK has some of the worst employment rights across Europe?

[Kevin Hollinrake]

Yes, those rights have got better. We have introduced legislation that covers the right to request flexible working, neonatal care leave, carers’ leave, protection to cover redundancy during pregnancy and return to work, the right to request predictable terms and conditions, the tipping Bill, and shared parental leave. All those things have been introduced, or supported, by this Government. We see those protections not as an opportunity to create a wedge issue, but as the right thing to do by our workers.

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[David Linden]

Is the Minister seriously trying to tell the House that the former Secretary of State, the right hon. Member for Welwyn Hatfield (Grant Shapps), did not relish the opportunity to bring forward the Strikes (Minimum Service Levels) Act 2023, seeing it as a wedge issue that would cause trouble with the Labour party? Come on!

[Kevin Hollinrake]

That is a refrain that we constantly hear from the SNP. To be fair to the hon. Gentleman, he did refer to ensuring that we worked alongside hospitality on the guidance, but apart from that, there was nothing in his remarks about the needs of business, and the legislation is about the needs of business. The strikes that affected this country, particularly at the end of last year and in the year before last, cost the hospitality sector around £3 billion. That is why we legislated as we did, and we feel it was the right thing to do.

The hon. Gentleman would do well to reflect further on the needs of business as well as the needs of workers. We believe that there is a balance to be struck, and he has got that balance wrong in Scotland. Hon. Members need not listen to me; just look at the numbers. The most recent figures for economic growth in Scotland over the 10 years from 2011 to 2021 show Scotland’s cumulative GDP growth at 7.2%, England’s at 14.9% and the whole of the UK’s at 12.9%. SNP MPs would do better to go back to their nation and constituency and drive economic progress forward.

My hon. Friend the Member for Watford (Dean Russell), who has done such good work in this area, talks about fairness. I know he stands up for fairness, and for Watford; I have seen the amazing montages of all the times that he has mentioned Watford in this Chamber. He deserves plaudits for his work. He says that he was lucky, but as the great Gary Player said, the harder you work, the luckier you get. The success that my hon. Friend has been an instigator of today is due to his hard work and determination. He talks about what we have done on communications, working with employer groups, employee groups and the hospitality sector. Yes, we do that—we work with trade unions, ACAS, UKHospitality, the British Beer and Pub Association, the British Institute of Innkeeping and others to ensure that the code of practice and the guidance that will follow will leave them fully cognisant of the requirements on the sector—a sector that is so important to our economy.

My hon. Friend the Member for North Wiltshire (James Gray) said he does not like giving tips. He is free not to give a tip if he does not feel it is appropriate, but most people would say that for good service, they would be prepared to provide a tip. The key point of this legislation is that that tip should be retained by the individuals who provided the service.