Hospitality Sector: Tipping

Paul Sweeney Excerpts

Wednesday 7th March 2018 Westminster Hall

[Laura Pidcock (North West Durham) (Lab)]

I declare an interest as a member of Unite the union.

The practices at Bristol-based Aqua Italia, which have been so methodically exposed by my hon. Friend the Member for Bristol North West (Darren Jones)—I thank him very much for raising this important issue with the Government—and, of course, the Bristol Post are, sadly, part of a much bigger picture of exploitation in our low-pay economy. My hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) outlined so eloquently the multitude of issues in the hospitality sector.

When I was a waitress and then when I worked in a pub, it was quite a regular practice for tips to be used to balance the till if it was under what it should have been at the end of the night. The worker would feel like a culprit because their tips were being used; they would feel that they were somehow being accused of defrauding their employer out of that money. But with thousands of transactions, there will be mistakes, and of course it was clearly very unfair to ask the workers to provide the money out of their hard-earned tips.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

My hon. Friend shares a very typical anecdote about something that many low-paid workers will experience; I speak as one whose first job was as a waiter in a well known Glasgow pizzeria. The typical practice was to be paid a pound under the minimum wage and then to have a tip allocated as a wage per hour to bring the person up to the minimum wage, so patrons of the restaurant were unknowingly contributing to subsidising the basic wage of the staff. I would often tell them that by giving us a tip, they were simply subsidising the employer to pay the wages. This practice is absolutely disgraceful, and that is why the work of people such as Better Than Zero is critical to addressing the massive inequalities that we see in employment.

[Laura Pidcock]

That is absolutely right. My hon. Friend gives a terrible but, I am sure, quite common example of what is happening in the hospitality sector. I implore everyone in that sector—and in all sectors, of course—to join a trade union, because only through a trade union can they have greater workplace rights. Also, consumers will become more aware and ask questions about what is happening to the tips when they are in an establishment.

What happened at Aqua Italia has been very well set out. Most striking was the case of the woman who had to go to a cashpoint at the end of her shift. How draconian is that? What century are we in when somebody has to pay just to be at work? Of course, the mantra of this Government is that for people to get themselves out of poverty, they must be in work. That is clearly a story to the contrary.

It is astonishing that this practice is legal, and it is more commonplace than people imagine. Although it remains within the law to treat people in such an extraordinarily exploitative way, it certainly cannot be said to be moral. The problem in the hospitality sector was and is the chronic lack of regulation, which has meant that exploitation—especially of young people, who perhaps are unaware of their rights and of the benefits of being in a trade union—has been allowed to flourish. That shows that we cannot rely simply on self-regulation in that sector.

Trade unions have taken a special interest in the sharp practices used in the hospitality sector since at least 2008. In May 2015, after it emerged that restaurants such as Pizza Express, Bill’s and Strada were taking tips and service charge payments intended for staff, Unite the union launched a summer campaign against these practices. For example, Pizza Express claimed an 8% so-called “admin fee” from any tips paid on a card. That is a huge problem, which has been repeated. There was public outcry as the endemic nature of the problem was displayed and publicised via social media. The huge public reaction forced the Government to act. They launched this call for evidence into tipping practices, followed by this consultation. However, as has been repeated consistently: nearly two years on from the consultation, what action has been taken?

In June, Unite campaigners handed a 6,500-signature petition to the Business Secretary, urging him to release the Government report into tips, but it still has not been published. The petition called on the Business Secretary to give staff 100% of their tips with complete control over how they are shared, to ban the bogus tronc schemes and make the code of best practice mandatory. For every single day that goes by, more abuses come to light. The so-called “pay to work” schemes are part of this broader set of practices, which cynically exploit restaurant workers and customers, who are none the wiser.