Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the Deputies. We made a very significant change in this legislation as it developed on foot of the debate in the Seanad in particular but also the debate here. The original plan was proprietors or employers would just need to be clear about what a mandatory service charge was and where the money went. We have changed that now in this law. When this law is passed and fully commenced, a mandatory service charge must be treated in the same way a tip or gratuity would be. It cannot be used to make up basic wages. It must be given to staff as though it was a tip. That is very important because for years people have been not leaving a tip because they thought the mandatory service charge was the tip. In fairness, it is something I have been asking about every time I have gone to a restaurant or a bar for the last year or two. In almost all cases that is the case but not always. Once this legislation is enacted and commenced it will be very clear a mandatory service charge is the same as a tip. That is increasingly important because now more and more people leave the money electronically as they do not carry cash the way they used to, and this will do that.

However, the legislation is not intended to abolish all surcharges and there will be occasions where proprietors impose a surcharge. It might for example be an energy surcharge, which you see being applied in some places now, or be a group booking surcharge. I am told if you have a very large booking of 30 or 40 people there are additional costs and you need to take on additional staff to those you would need if there were the same number of people in different groups. It could be for a party for example, and there are additional costs associated with that. This is why I cannot accept the amendment tonight. There is a one-year review written into this legislation and I am keen to see how it operates. If we find it is being abused or manipulated in some way, the option is there for us to come back to it in the House.

See this speech in context