Hospitality sector 'tipped' for growth

A new recruitment drive aimed at the hospitality sector has been launched in Scotland. ‘Rise Fast, Work Young’ is aimed at championing hospitality as an industry that quickly lets employees ‘rise up the ranks’ and ‘keep their spirit young’.

The initiative is backed by Hospitality Rising, an organisation born partly in response to the recruitment challenges posed by Brexit and COVID-19. It aims to create an ‘innovative, world-class marketing campaign’ to attract new talent to the estimated 400,000 vacancies in the hospitality industry. The organisation is a collaboration between around 300 UK hospitality stakeholders, including the likes of Pret A Manger and Tom Kerridge, who are pledging at least £10 per employee to assist in the campaign’s effort. They consider £1 million to be the minimum amount required to make an impact and have already raised more than £850,000.

But Unite Hospitality has urged caution. It welcomed the ethos of the campaign and its ambition to tackle the recruitment crisis but said ‘the most effective antidote to that crisis is for employers to offer better pay and conditions for the workers who drive the sector’. It notes that currently, hospitality is the lowest-paid and most contractually insecure sector in the UK economy.

One development which may assist in alleviating this insecurity is the Employment (Allocation of Tips) Bill. We previously discussed the introduction of this Bill in this blog with the caveat that Private Members’ Bills, such as this, often do not come to fruition. However, this Bill is likely to become law. On 12 October 2022, it reached Parliament's ‘committee stage’ which allowed for a detailed, line-by-line examination of the Bill. Any proposed amendments are discussed and voted on and eventually every clause in the Bill is agreed to, changed or removed. This Bill has passed to the ‘report stage’, scheduled for January 2023, with no amendments.

So what does it aim to do? 

As it stands, this Bill seeks to require employers to pass on 100% of tips to workers without any deductions (save for those required by law e.g. tax and NI) no later than the end of the month following the month in which the tip was paid. This includes allowing agency workers to have a fair share of tips received. This provision has been very positively received, especially given the increased prevalence of customers paying and tipping by card. Tips paid by card as opposed to cash are paid directly to the employer, leading to a lack of transparency and wiggle room for deduction (e.g. for processing fees). This practice was recently highlighted by a union grievance raised against Cameron House. Unite the Union, representing around 60 employees, said the hotel had introduced a 15% service charge on tips paid by card. Over the year, this amounted to £138,000 being withheld from staff. This legislation, if enacted, would prevent that.

The Bill also provides for employers to create a written policy on tips and keep a ‘tipping record’ for employees to view on request. The intention is that a statutory code of practice will be created to set out how tips can be fairly distributed and how transparency around tips can be ensured.

The Bill still has several stages to go and may end up being passed in an amended form. In any event, support for the Bill and its ethos is strong and hospitality employers should expect some regulation of tips and good practice shortly.