Michael Lowry (Tipperary, Independent) | Oireachtas source

I compliment the Minister on taking the initiative and bringing this Bill before the House. I also acknowledge his capable and competent stewardship of his Department and his willingness to meet various representative groups and to listen to their advice and requests. This Bill offers fairness and prioritises equality for ordinary workers in businesses. This is a positive and welcome acknowledgement of the major role that employees play in keeping businesses afloat. This legislation does that. It has the potential to increase the payments that employees receive in businesses, such as in the services and hospitality sector. It will also increase their incentive to excel and their determination to provide the best possible service to businesses' clients and customers. News about this Bill is not a banner headline. All too often, the media favour more sensational stories but this is, in fact, a good news story and one that has been sought from the industry for a long time.

This legislation is going to provide bigger earnings for employees and service providers across the country. It also puts right a wrong that has long existed, which most people seldom, if ever, thought about. When most of us go out for a meal, attend the barber or hairdresser, travel by taxi, have luggage carried to a hotel room or have groceries carried to a car, we feel that giving a tip to the person who helped us is the right and proper thing to do. It is a way of saying "Thank you" to the person who has helped us by providing a service for us. It is also good manners and common decency.

Let us take the situation of a porter carrying our bags to a hotel room. We may hand him or her a couple of euro for the effort and we are grateful for having received that help. Yet when we checked into the hotel, we did not give any tip to the hotel receptionist who has also provided us with a service. Was he or she less helpful? No. We could not have checked into the hotel without that assistance. At the end of the week, the porter could have earned a nice amount of extra money, whereas the receptionist would still just be paid the usual wage. This scenario is just a simple and over-simplistic example of how the payment of tips is unbalanced and inequitable. It serves to show how some staff benefit while others are overlooked.

The situation becomes more complicated and confusing when people go out for a meal. The waiter or waitress looks after them throughout the meal, brings them what they ordered and gets them anything they want to ensure that they enjoy their dining experience. The customer is satisfied, the meal was perfect, delivered promptly and nothing was overlooked. Those people look at their bill and they are happy to note that a service charge has been included. They feel they have been provided with a top-class service and have no problem paying the charge in the belief that they are giving a little extra tip to the staff member who helped them. The vast majority of us believe that the service charge is another word for a tip. It stands to reason, in most people’s minds, that the charge is being made for the service that has been received.

Some people who have been less than happy with the service they have received have refused to pay this charge, in the same way as they would refuse to leave a tip. They do so with the honest conviction that their waiter or waitress did not deliver a service worthy of additional payment. Most people never query a service charge, pay it willingly as part of their bill and do not question where the money goes. What people do not realise is that this service charge is not a tip. In most cases, the money received through the service charge goes towards paying the staff their basic wages. There is nothing wrong with this.

In fact, it helps to ensure that staff wages and other costs can be covered. However, it is not an additional "Thank you." for the service a customer received from an individual employee. It is used to fund the overall running of the establishment. The Bill will end this misunderstanding. The owner of a business will be able to include a service charge in bills because, after all, running a business is a highly competitive and costly exercise. There will no longer be any misinterpretation or misunderstanding of what the service charge is used for by the business. Clients and customers will be left in no doubt as to what their money is being used to cover.

Tips, on the other hand, will be a guaranteed additional boost to staff members. As most customers or clients of a business now pay through electronic transactions, employers will be obliged to ensure money that enters their account in the form of tips will be distributed equally and fairly to employees. Cash tips will also be distributed equally among staff, which is to be welcomed. If a customer decides to leave an enormous tip following a meal or provision of a service, all employees will benefit not just the front-of-house staff. All of those who made the customer happy through their work behind the scenes will be looked after. This will create a fairer system across the board. In addition, employers will be legally obliged to display a notice on their premises that clearly states how they distribute any tips received by employees. This will ensure fairness for all employees and protect individual interests under the new legislation.

One of the most beneficial aspects of the Bill is that the distribution of tips will not impact on employees' contractual wage. They will receive their wage as usual with tips being an additional bonus. As the vast majority of people in the service industry, particularly in the hospitality sector, earn the minimum wage, the Bill will help to make taking up employment in this sector more appealing. The hospitality industry as a whole has been seriously struggling to hire and retain staff particularly since the ravages it experienced due to the restrictions during the Covid pandemic. The ability to increase their minimum wage by earning additional money through tips will hopefully tempt more people to return to or take a closer look at working in the hospitality sector. The system will also encourage employees to provide an even better service to customer with the aim of earning a larger tip. It will act as an incentive to deliver greater customer care that will in turn help to attract more clients or customers of the business.

The Bill has the capacity to improve payments to staff, allow businesses to continue to provide for the costs of running their operations, and enhance the experience of the customer or client. It may not be headline grabbing but it is worthy and welcome legislation, and I am happy to support it.

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