Mr. Clement Shevlin:

On behalf of the ONE Galway movement, which is a collaborative initiative between trade unions, student unions and community groups in Galway, I am pleased to address the committee on the general issue of tipping practices in the hospitality sector but with specific reference to our views on the general scheme of the Bill before it.

I will be blunt and say that the legislation being scrutinised today simply does not address the relevant issues relating to tips. In fact, it contradicts what has been stated by Fine Gael in various new media to the effect that the proposed legislation would give a legal right to tips for workers and staff. This is simply not true. The proposed legislation does not go anywhere towards addressing employees' right to tips, the lack of transparency for staff about what happens to their tips or, and equally importantly, transparency for the general public as to where their tips go. There is no legal protection for employees regarding tips being proposed in this proposed legislation. To propose that a bad employer would no longer be able to use a tip as a top-up to a contracted wage is a positive step, but it still allows for a bad employer to withhold that tip money to use for other business purposes, such as breakages, walkouts and entertainment. The general scheme of the Bill is shockingly silent on how tips should or could be distributed. Our extensive anecdotal evidence, and emerging independent empirical evidence, is that using tips to top up wages is a relatively minor issue compared to other reasons for withholding tips or, indeed, no reason at all besides the will of the employer. The proposed Bill will change nothing for vulnerable hospitality workers who are having their tips regularly stolen from them. In fact, it could mean that, because the employer cannot top up wages with the tip, the staff could end up back on the minimum wage with still no protection or transparency as regards their tip money.

Our campaign research has shown us that not all employers engage in withholding tip money, but since there is little or no transparency in the distribution of tips, it is unclear to employees what percentage of tips they are actually receiving, with some indicating that, on a busy week, they would receive the same tip money as on a slow week. This situation is enough to justify a definitive change in legislation to address this blind spot on the legal ownership of tips. Restaurants in Galway have endorsed and supported our campaign because they believe that legal clarity is required and only fair where tips are concerned. We suggest that the proposed Bill does not go far enough for workers, for the trade unions who represent them and for good employers within the sector.

This is a €5 billion euro sector, but one that has the highest percentage of minimum wage workers, who are the lowest paid and vulnerable workers in the economy. While we understand that tipping is arbitrary and discretionary and no substitute for a living wage, we are asking the committee to ensure that employees are able to take home the money that they actually earn. While we welcome the opportunity to discuss the general scheme of the Bill, other legislation that would address the concerns of workers is being held up in this very establishment.

I wish to take this opportunity to address some of the criticisms of the proposed Bill. The Low Pay Commission report issued recommendations without adequate consultation with workers or in-depth research into the sector, which my colleague will comment on in greater detail. We disagree with the Minister that this legislation is dealing with the more contentious issues relating to the treatment of tips, as we believe that it is more contentious that employees, under this legislation, would still not have a right to their tips. We also believe that the Private Members' Bill should not be allowed to be stalled in favour of this proposed Bill because of so-called potential unanticipated consequences. The unintended consequences for workers employed in this sector is not being able to pay rent, put fuel in their cars or continue in college because the tips they rely on - because they have to - are taken away from them with no recourse of action or right to resolve this.

Our estimates suggest that workers will not be faced with a massive tax bill by Revenue, given that their hours of work and earnings are such that the declaration of their tips for tax would barely raise them above the tax threshold. We have heard that the cost of the Private Members' Bill for the WRC and labour inspections would be too high for the Exchequer, yet the Minister’s office suggests that its own proposed amending legislation would be close to cost-neutral.

Our campaign is clear. It calls for greater transparency in the appropriation and distribution of tips in the hospitality sector and that employees have a right to their tips. How might that work? An example of how this might be implemented and deal with the transparency issue is the area of card tips. Acknowledging that we are moving towards a cashless society, with more and more tips being paid by card, securing at the very least the right to card tips for employees would address the issues raised at this meeting, those being, transparency in the system and the right to tips. It would provide transparency to customers, who would know that the tip on the card would be received by workers, which is not the case currently. It wold provide transparency for staff who would have a record of tips paid through the card system, which could then be transferred to payroll and distributed in an agreed manner among the staff. It would provide transparency for employers, who would know that customers deliberately made a payment on their card intended for the staff. With the card tips separated out, they could be seamlessly transferred to the payroll system, from which it would be distributed in an agreed and fair manner based on a pro rataof working hours, with tax already paid via payroll. The transparency of such a system would mean the sticker of notice on tips policy would have genuine legitimacy. As the payments would already have been recorded, there would be little additional cost to the employer, and this system would also provide evidence of practice.

This provision would bring the Minister’s proposed Bill a little closer to giving workers protection of their tips and transparency for customers, and be something good employers would surely support.