Employment (Allocation of Tips) Bill

Edward Argar Excerpts

2nd reading
Friday 15th July 2022 Commons Chamber

[Edward Argar (Charnwood) (Con)]

I very much welcome the Bill from my hon. Friend the Member for Watford (Dean Russell). As you will know, Mr Deputy Speaker, he is nothing if not persistent once he has a cause to pursue. I recall that he introduced this Bill in 2021, and as it did not proceed into law at that stage, he is back again and determined to get it through the House on this occasion. I am very happy to be here today to support him in that endeavour.

A lot of the speeches have focused on the hospitality industry—restaurants, bars and similar—but of course, as has been mentioned, this issue is drawn more widely than that and goes across the broader service industry of hairdressing, barbers and so on. A whole range of services are impacted by the issue that my hon. Friend is highlighting today.

Many of our constituents will be unaware, and would be surprised were they made aware, that there is no law—no statute—that directly addresses this issue, and that tips or service charges paid through the business are legally the property of that business. Therefore, it is down to the good will of that business or the approach of that business to ensure that tips get to the staff for whom they are intended. There is no statutory protection of that currently.

Yet as my hon. Friend and my hon. Friend the Member for Kensington (Felicity Buchan) have said, when any of us or any of our constituents go to a restaurant or the barber and pay a tip, we do it because we want to reflect to the members of staff who have provided exceptional service or courteous and friendly service to us that we recognise that service and want to reward them directly for it.

I take the point made by my hon. Friend the Member for Kensington, which is absolutely right, that this is not just about those who are front of house with whom we interact, but about the people in the kitchen, those doing the washing up, and a whole range of others who play a key part in the experience we have enjoyed. It is right that tips are distributed fairly among those who have played a role in our experience. None the less, we expect those tips or service charges to go to those people who have done the work for us, so I very much welcome the Bill.

My hon. Friend the Member for Watford was absolutely right to highlight throughout his speech the word “fairness”, and the Bill goes to the heart of that. It is about fairness to those who are providing the exceptional service and fairness to consumers who believe that the tips and service charges they are paying will go to those individuals. At this point, I should of course pay tribute to the campaigners and to the staff who do the amazing job. I also pay tribute—as the hon. Member for West Ham (Ms Brown), who is not in her place at the moment, highlighted—to Unite the union and others who have been pressing this issue.

When I first entered the House in 2015, this was one of the issues running hot in the news. At that stage, the evidence suggested that about two thirds of employers took some form of deduction from tips or service charges, and sometimes as much as 10%. Of course, there has been progress since then, which is very welcome. However, during the pandemic, people developed behaviours—I do not think they have changed subsequently —of paying for things less with cash and more with cards, therefore putting any tips or additional money through the business in that way. I think the Bill is very timely, and it is the right thing to do.

As has been set out, the Bill creates a legal obligation essentially to allocate tips fairly. Rightly, it does that through a statutory code of practice. That is the right mechanism because it allows for a degree of flexibility and the code to be developed in slightly slower time. There will be complexities, which hon. Members have highlighted, relating to businesses and how to define particular elements, so that is the right approach in such a complex landscape.

The other point highlighted is about people—staff and consumers—being aware. Transparency is vital in this space, so I welcome the inclusion, in the opening remarks from my hon. Friend the Member for Watford, of a written policy that gives people transparency and an understanding of what they can expect, but also—

[Jill Mortimer]

Does my hon. Friend agree that that is one of the greatest problems with this? Relatively recently, we have always had on bills an optional service charge that is anything but optional. Many people pay it without even really looking at it or considering it, and no one knows if the money goes where it is intended to go and should go. The Bill will make the very important change that we need.

[Edward Argar]

My hon. Friend is absolutely right. That goes to the heart of transparency and openness to the consumer but also to those working in this context. My hon. Friend the Member for Watford, in drafting and presenting the Bill, has, as ever, been diligent. He has set out the route to an employment tribunal, which will be an option, and given those tribunals the remedies they need to make redress, should they find a particular employer has not complied with both the spirit and the letter of the Bill and the code of practice.

From my understanding of the Bill, this is hugely important. The Bill has only 15 clauses, but they are important and tightly drafted. It addresses not just the passing on of tips and service charges without their being top-sliced and deducted, but the vital need for fairness in how they are distributed between staff.

I am absolutely delighted to support my hon. Friend’s Bill. It is about fairness to consumers, but most importantly fairness to the staff who day in, day out provide all of us with exceptional service. They have been through a challenging time. It is important that we recognise this in statute. I suspect many businesses do the right thing and it is always a shame when one has to legislate, but it is right, just as with the previous Bill we debated, to do the right thing by those who provide exceptional and courteous service to us. It is about the kind of society we wish to see and the approach we wish to see within that society. I welcome my hon. Friend’s Bill. He has my complete support and I very much hope that it will have a smooth and swift passage on to the statute book.