Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I wish to share time with Deputies Eugene Murphy, Butler and Murphy O'Mahony.

Having read this Bill, I recommended to my party that it should be supported and we intend to support it. The Bill seems to set out to do two things which are quite simple but, to me, eminently sensible. It seeks to ensure that when a tip or a gratuity is given to a worker in a place such as a restaurant, which is intended for him or her, the person for whom it is intended gets it, and the employer has no right to any part of that gratuity. Second, it seeks to display in a prominent place of business where this sort of activity takes place the policy relating to how these gratuities are dealt with and distributed in order that people will know where their money is going. It seems to me that were I to go out onto the street on a busy day to ask people their opinion on whether those two propositions should be put into law, I do not think I would find a single reasonable person who would disagree.

I acknowledge the Low Pay Commission referred to taxi drivers, hairdressers and such other categories of employment where tips sometimes come into play but the overwhelming majority of people about whom we are talking work in the hospitality industry. They are at the very lowest point of the pay scale, as the Minister will be aware. Many people who rely on tips are part-time workers, short-term workers or workers in precarious employment. They are people who struggle to make ends meet from one end of the week to the other. I was scandalised. I always paid tips in cash and always assumed that when anybody paid a tip, it went to the person for whom it was intended. While most employers behave reasonably, I was scandalised to find that quite a percentage hold on to a payment which was clearly for the benefit of somebody else, namely, their worker. That is wrong and should be legislated out of existence at the earliest possible opportunity.

The Minister has stated she is bringing in her own legislation. I have looked at her proposal. It is laudable and I support it but it will not deal with the issue. It is much narrower. Let us face facts. I do not know what the thinking of the Government is when it proposes a panacea. It wants to ignore this legislation and introduce a panacea which is not a panacea at all. It will not deal with the problem. The Minister can take my word on it.

The Government has raised a number of objections, namely, that the Low Pay Commission told it that because there will be a change in the way these things are taxed, those who are in receipt of tips will finish up with less take-home pay. That is a charade. It insults the intelligence of this House. I do not care whether the advice came from the Low Pay Commission, the high pay commission or any other commission. The fact is that this Bill is about giving workers legal entitlement to what was given to them. That is it. It is not about tax law. It does not change tax law in any way, shape or form.

There are three ways in which a person who is employed in the restaurant business, for example, can get a tip. He or she can get it through a service charge, which is imposed for the benefit of staff. He or she can get it paid by way of credit card, which also goes to the employer. He or she can get a cash payment. It seems that as far as taxation administration is concerned, nothing will change in the first two cases of a service charge or payment by credit card. That comes to the employer anyway and the employer does what it has to do, namely, deducting tax, PRSI etc. In the third category, where one gets a cash payment, the law in this country is that one has to declare that for tax purposes. It is taxable under the PAYE system. The Government appears to be saying that if one changes the law in the way proposed by the Bill, it is still taxable but the employer will be operating the tax on it rather than the employee declaring it directly to Revenue.

Why would the Minister say in her response that the employee will be less well off? The tax rates are the same. Instead of going directly to Revenue, it goes through the employer. Is it the Government's argument that in this third category of payment by cash, it is aware that people are not declaring these cash tips, there is widespread tax evasion and that if we do something to ensure that workers become legally entitled to their tips, all of this will come to light and they will be worse off? With all due respect, that is a lamentable argument for the Government of a sovereign state to hide behind. In any case, the third category I mentioned will become less relevant as the years go by because we have crossed the threshold of a cashless society. In ten years' time, there probably will be no such thing as cash and everything will be paid by credit card, therefore, the argument will be redundant.

The Minister and the Taoiseach dragged in talk about social welfare, housing assistance payments, HAP, and medical cards. They have said people will suddenly not get their medical cards or they may not get as much in social welfare payments or any at all or they might not be able to get HAP. As I understand social welfare law, if somebody is getting a means-tested social welfare payment, his or her whole income is reckoned for that purpose, including tips if he or she happens to be working in a restaurant and is in receipt of tips. That does not change. The same thing applies to the HAP and medical cards. A person's entire income is taken into account. Is the Government again saying that those people are wilfully concealing part of their income, which will now come to light if the Government at last is forced to do the right thing? It is a spurious, threadbare argument.

I will give the Minister one bit of advice as a long-standing Member of this House. We are more than three years into the lifetime of a minority Government. The future is very uncertain. The prospect of a general election looms ever closer, like the sword of Damocles. We can see it right in front of us. The Minister is proposing that some sort of half-baked legislation, which is being drafted as we speak, will appear some time in the indefinite future - maybe before the end of the session - but it will not be law before the end of the session. It seems to me that this legislation deals comprehensively with the problem. It is not perfect. There are places where I would like to see it amended. I am prepared to sit for as many hours as I have to sit in committee to make the appropriate amendments and to discuss any Government amendment.

We should remember that the figures indicate that many low-paid workers are in consistent poverty. People at the lower end of the scale depend on the gratuities to survive from week to week are having what is rightfully theirs taken from them. That is happening and it will continue to happen. As a House, we have a moral obligation to do something about this and to do it now without delay. I respectfully suggest to the Minister of State, Deputy Stanton, that the simplest way to do it is to allow the Bill to pass. We will all have our ideas for Committee Stage amendments. The Bill can go to Committee Stage next week and, as a member of the committee, I am sure I speak for my colleagues on all sides, we will sit for as long as it takes to get the Bill as right as possible and have it passed into law before the end of this session. The low-paid workers of this country who are in precarious employment and struggling to survive deserve no less.

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