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

I welcome the contributions from Senators and the broad support for this Bill.When I first decided we would revive and reintroduce it, I actually believed it would be very simple. I thought we would do just two things: make it illegal to use tips to top up wages, bearing in mind that it is already illegal to top up to the minimum wage but not to other contractual rates, and introduce transparency around tips and service charges to make sure they go to the staff and so people will know how they are divvied up. Most people do not know how much goes to the server and how much to the people in the kitchen and so on. I thought it would be that simple but it is not. As is always the case when one tries to legislate, one discovers all the various nuances. One discovers that there are sometimes areas that are best not to legislate for because one can do more harm than good.

Cash tips are generally, but not always, controlled by the staff and do not go through the books. Electronic tips are paid when somebody pays the bill electronically. These, by definition, go through the books. There are now apps, such as TiPJAR and Strikepay, that can be used to pay electronically to a server a tip that does not go through the employer's books. It is a bit like giving somebody money with Revolut. I came across these apps only in the past couple of weeks. There are mandatory service charges and discretionary service charges. While they sound similar, they are very different. A discretionary service charge involves a choice whereas a mandatory one gives no choice. The matter is more complicated than I believed it would be. My sense, and the sense I have heard from Senators this evening, is that we have to strengthen the Bill regarding service charges so it will be clear they are for staff and not additional income for the business. I will return to that a little later.

On Senator Doherty's remarks on the proposed section 4B, we will determine whether we can change the wording so the employer must consult the employees or secure their consent. However, we will have to think about what happens when that is not possible, particularly where there may be a transient or unorganised workforce in a certain business.

On Senator Garvey's questions on the Low Pay Commission report, I have asked the commission to advise the Government on how we would move towards a living wage for Ireland. There are several decisions that will have to be made when I receive the report. I have not got it yet. We are supposed to get it in quarter 2 or in the next couple of months. We may get it at the end of quarter 1, but certainly in quarter 2. A couple of big decisions will have to be made, including on how the wage is calculated, whom it applies to and how it should be phased in.

There is a programme for Government commitment to move towards a living wage for Ireland and to get it done during the course of this Government. I guess that is the sixth workers' right. The seventh is auto-enrolment, in respect of which the objective is to ensure workers in the private sector who do not have an occupational pension have access to one. Half of them do not. If we secure these seven rights in the term of this Government, we will not have done a bad job, but I am not committing to securing rights six and seven this year. I am committing to the first five this year and to the sixth and seventh over the course of the term of the Government.

On Senator Garvey's suggestion to have an information campaign, we will absolutely have to act on that. We will have to run the campaign in different languages and work with various stakeholders to get the information out about the new law, if and when it is enacted.

Senator Gavan was asking about cash tips and transparency regarding them. We will consider this. The advice from the Workplace Relations Commission is that regulating and managing cash tips just would not be workable. Generally speaking, but not always, they are managed by the staff. If there were a right to redress, who would one be seeking it from? It would presumably be from another staff member. It would be new, in my view, for somebody to take a case on tips, with one staff member against another going to the Workplace Relations Commission. It is not something I am ruling out but something we will have to consider. It is complicated. By the nature of the fact that cash is involved, there would not be any evidential trail unless somebody, somehow, had video evidence or there was sworn testimony. Cash tips are very complicated to regulate for, and that is why the Workplace Relations Commission recommended we not do so. However, we will give it some thought and consider amendments if there are any.

On discretionary service charges, Senator Gavan is correct in that they are considered to be tips and gratuities. On mandatory service charges, the view of everyone in this House is that they comprise money that should go to the staff. Most people believe they do but they do not always. That is a problem, so it is a question of whether we can strengthen the legislation on Committee Stage to make it clear that a mandatory service charge should go to the staff. Potentially, there should not be mandatory service charges at all. A service charge is a funny thing, is it not? Most of the time when you receive a service, you pay and there is not 10% on top. In other service industries, such as the hair and beauty industry, I have never come across a service charge. Maybe it happens. It does not in the barbershop, anyway. There are two options: to outlaw mandatory service charges altogether or to be very clear that the money must go to the staff.

I was fascinated to hear about the origin of service charges. I was not aware of it. It is an interesting piece of Irish labour history that I did not know. I do know about the tronc, however. The term comes from France, where, originally, there was a tronc, or alms box, at the back of a church. Very clearly, a gift is implied.

Work permits comprise a big problem at the moment. I am sure all the Senators' offices are getting many queries about them. I certainly am. There is now a backlog of approximately 19 or 20 weeks in processing work permits in the Department. There is a reason: employers are struggling to get staff, not just in Ireland but also in the rest of the European Union. The number of work permit applications is up 70% on this time last year. That is a distortion because last year was a year of the pandemic, but even compared with 2019, before the pandemic, the figure is up by about 50%. Therefore, there is a huge demand to bring people from outside the European Economic Area to Ireland to work. Since we have made work permits possible for many more categories, including in construction and agriculture, there has been a big increase in demand. The number of staff processing work permits has increased from 19 to 55, but many of them have not done it before and are learning about it for the first time. It will take a couple of months before we can improve the situation, but we are monitoring it weekly.

Senator Burke asked a very good question: could an employer have a no-tips policy? That is not saying there should not be any tips but that it is not his or her business. I believe the answer is "Yes" but I will check. Whether an employer could just say he or she does not get involved with tips and that they are a matter for the staff is a good question that we need to check out. In that scenario, the tips would have to be cash only or paid through Strikepay or TiPJAR. Once the money is paid electronically, it does become the employer's business, and that is where it gets complicated. The world is probably a lot easier when there are cash tips only. It has been complicated by electronic payments.

The legislation does not alter the tax treatment of tips in any way. That is a matter for the Finance Acts. I have deliberately not addressed the matter in this legislation because any change to tax treatment would have to be achieved through the Finance Acts.