Wednesday, 12 June 2019
National Minimum Wage (Protection of Employee Tips) Bill 2017: Report and Final Stages
I welcome the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty. Before we commence, I remind Senators that a Senator may speak only once on Report Stage, except the proposer of an amendment who may reply to the discussion on it. Each non-Government amendment must be seconded.
I ask Senator Gavan to move amendment No. 1.
I move amendment No. 1:
In page 3, between lines 10 and 11, to insert the following:
""employee" has the meaning assigned to it by the Organisation of Working Time Act 1997;".
I welcome the Minister to the House. There is a tremendous show of support for the Bill in the Visitors Gallery, including by colleagues from SIPTU, Mandate, ICTU and Fórsa. I see, too, representatives of the One Galway and One Cork movements, which comprise trade unionists, student unionists and community groups, all of whom have played an instrumental role in supporting these proposals. The Bill has taken on a life of its own because there was real strength of feeling that a wrong was being done to workers in this sector. I pay tribute to all the people in the Gallery who have worked to progress these proposals. I am proud that the Bill was brought forward by Sinn Féin but, in fact, it belongs to our visitors, who campaigned on the streets to raise awareness of the issues. Some of them were in Ratoath last weekend voicing their support for the Bill and asking Senators to support it. I welcome, too, the warm support from colleagues in the Labour Party, the Civic Engagement Group and the Independent Group of Senators. I understood our Fianna Fáil colleagues will likewise support the Bill. We do politics best in this Chamber when we find where agreement can be reached and take a cross-party approach.
The Bill proposes to do two simple things. First, it gives hospitality workers a right to their tips. We know from research that one in three workers does not get his or her tips. Second, the Bill requires restaurants to display their tipping policy, something all customers would welcome. At the heart of the Bill is our view is that all workers who deliver a service in an establishment where a service charge is levied on customers should receive that fee. Mr. Richard Grogan, an employment law specialist who contributed to the work of the Low Pay Commission and described its report as staggering, has acknowledged that this is at the heart of the Bill. Customers who pay a service charge in a restaurant assume, as I did before getting involved in this, that the charge will go to the workers. However, we know from the excellent work of The Irish Timesjournalist, Ms Deirdre Falvey, that in many cases - in large chain restaurants, in particular - the owners pocket the service charge and the tips.
We had a meeting yesterday in Leinster House to which we invited Oireachtas Members to hear about our proposals. I regret to say that it was attended by colleagues from all parties and groupings save one. I have spoken to colleagues in Fine Gael who tell us they really want to support the Bill and cannot understand why the Minister is opposed to it. Yesterday, we heard testimony from a worker in a restaurant 100 yd. from this building who has been seeking to validate her right to the tips which were being withheld by the employer. When she joined a trade union with a view to organising to ensure she and her colleagues received the tips to which they are entitled, she and one colleague were fired. It is important to note that there are many good employers, but there is a problem in the sector. We know that 67% of the establishments that were inspected last year did not comply with basic employment law. That is a shocking statistic. It is a matter of regret that the Restaurants Association of Ireland, a representative of which I debated on LMFM Radio this morning, has refused to engage with workers, trade unions or joint labour committees to resolve this issue. I do not understand why the Minister sided with that body rather than coming down on the side of justice. I appeal to her, in a spirit of co-operation, not to divide the House today.We have support across the Chamber and I ask the Minister to work with us on the Bill. I wrote to her on 6 March and regret to say I never received a response. I also wrote to her colleague, the Minister of State at the Department of Employment Affairs and Social Protection, Deputy Breen, who was in the Seanad for the last session on Committee Stage and did not receive a response from him either. We want to work with the Minister on the Bill which will not pass into law today, it will just pass through the Seanad. It still has to pass through the Dáil. If the Minister has concerns, she should work with us before the Bill is taken to the Dáil. If she kills it today, it will be the last opportunity in this Oireachtas to deal with the issue, which would be more than disappointing as there are too many workers who depend on tips to make a living each week and deserve justice.
What is the Bill about? I will tell the Minister how it started. It is about a woman I met in Limerick who was taunted in a night club in Limerick by her employer. It is a prestigious restaurant which I shall not name. The employer taunted her about the fact that she would never see her tips and that there was nothing she could do about it. The Bill is also about my brother-in-law who has worked in the restaurant sector all of his life. He has seen his tips stolen in almost every restaurant in which he has worked. The Bill is about the man in the west who works in a five-star hotel who was told that he would get his tips at Christmas. He left the position in October and when he called to the hotel, he was told, "I am sorry, but we are not going to give you the tips because you are no longer an employee."
The list of reasons tips are held on to is huge. They include breakages; the employee is a trainee; it has been a slow night; or a fiver is missing from the till. All of these reasons are trotted out. It is particularly unhelpful that the employer bodies have consistently refused to engage with Senators in this Chamber who represent trade unions and workers. We are aware that while Minister has met the employers, she has not met anyone in this Chamber. I say that respectfully. Senators asked for meetings but were informed that the Minister was too busy, although I acknowledge Senators have met some of her staff. There is something uneven and unequal in what is happening. I do not wish to make the issue party political because we are better than that, but all Senators are aware that there is a significant issue with tips which we should and need to tackle. However, I really regret to say it appears as though Fine Gael will vote against giving hospitality workers a right to receive their tips.
I shall deal with some of the other reasons given and then conclude. I am aware that I will have the right to respond to the debate on the amendment.
The issue of taxation has been brought up, but it is an absolute red herring. The position is clear. One is obliged to pay tax on tips. That is the law and the Bill does not change it in any way or fashion whatsoever. It has been suggested that in giving workers a legal right to receive their tips an army of Revenue inspectors will descend on these low paid workers who are on or earning just above the national minimum wage to demand their tip money. That is without any credibility whatsoever and it is significant that the suggestion originally came from the Restaurants Association of Ireland. They are the same people who will not talk to Senators.
Interestingly, on LMFM this morning the head of the Restaurants Association of Ireland - I will not name him - got into an awful pickle. At one point he said overall revenues were boosted by 10% by tips. He then realised what he had said and in the next part of the interview said he had not said it, but all of the listeners had heard it. There is a problem in the sector and we have a simple Bill which will protect hospitality workers in receiving their tips. It will require restaurants to display their policy on tipping. Good employers, of which there are many, have absolutely nothing to fear from the Bill.
I appeal once again to the Minister and her colleagues in Fine Gael. I do not believe it would serve the Chamber well to vote against the Bill. We have offered co-operation and to work with the Minister. It is a sincere offer made on a cross-party basis. I again acknowledge the tremendous support received across the Chamber. Colleagues were out on the streets in Galway, especially Senator Gerald Nash who has worked with me, with our colleagues from the Labour Party, those in the Civic Engagement group and Independent Members who came to me to say they would support me in the vote today. There has been an indication from Fianna Fáil Senators that they will do the same. I do not want this to be a victory for Sinn Féin; rather, I want it to be a victory for workers in the hospitality sector. As things stand, unfortunately, the Minister appears to be saying no. I ask her again to work with us. She has not met the people concerned, but they are here today. They have taken time off work to come because they know that there is a problem. Unfortunately, the Minister has said she will produce a Bill, of which nobody had heard until yesterday, this after eight years in government. While she has said there is a Bill in the offing, it will not tackle the key legal issue of giving hospitality workers a legal right to receive their tips. That is what we need. Even the Tory Party Government in Britain which may be the maddest Tory Party Government we have ever seen-----
The Senator is probably right. After eight months of research in Britain, even it admitted that there was a problem in this regard and that workers needed to be given a legal right to receive their tips. Right now the Minister is placing herself somewhere to the right of Boris Johnson. Seriously, we need to do better than that. I, therefore, ask the Minister to work with us and not kill the Bill today as there is too much at stake for workers. We have gone out of our way to build consensus on the Bill. I ask the Minister to join us.
I second the amendment and welcome the Minister, Deputy Regina Doherty. I also welcome the opportunity to speak to the Bill. I commend Senator Gavan, in particular, and his colleagues, as well as my colleague Senator Gerald Nash and the other Labour Party Senators who have been so instrumental in supporting the Bill. I welcome all of those in the Visitors Gallery who have worked so hard and for so long to ensure workers will have a legal right to receive their tips. I thank Senators Gavan and Nash for organising what was a really good and helpful briefing in the audio visual room yesterday, at which Fiona Dunne from the Irish Congress of Trade Unions, ICTU, a speaker from One Galway and others were present to highlight the importance of legislation such as this.
I also speak in support of Senator Gavan's amendment which is sensible. It seeks to place the Bill within the framework of employment protection legislation. That is an important aspect of the amendment and the Bill which should be seen within the wider context of ensuring protection for workers in vulnerable positions in precarious industries, as well as in industries in which traditionally they have been low paid.
I agree with Senator Gavan that it would be great to see a cross-party consensus emerge on this issue. There is consensus in this House across every party and the Independents, but, unfortunately, there is no support from the Government party of Fine Gael. During the debate in the House on a previous Bill of mine, the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill 2017 which was subsequently passed on Second Stage in the Dáil, we saw a cross-party consensus emerge on the need for the protection of workers and to ensure we would have in place a robust employment protection legislative framework. It would be very valuable if the same consensus emerged in the Seanad and the Bill was passed on Report Stage without a vote.
I am aware there has been great support from writers such as Deirdre Falvey, Richard Grogan and others who have illustrated the wider context and the need to ensure a legal right for workers tor receive their tips. They have also illustrated the really shabby practices across the hospitality sector in Ireland and elsewhere, whereby tips and so-called service charges are routinely withheld for spurious reasons. Like many colleagues, I worked for many years in the restaurant industry and the hospitality sector as a waitress, a bar person and so on. I am very much aware of the huge importance of tips in the industry. I was also privileged to hear a speech recently by Saru Jayaraman, the founder of Restaurant Opportunities Centres, ROC, United which has been building a major campaign across the United States of America to illustrate the unfairness of an industry that relies heavily on and withholds tips. The campaign also illustrates the history of the practice of tipping. It originated in feudal Europe and became widespread and established in the United States post-emancipation when the restaurant industry won the right to employ liberated slaves without having to pay them a wage. It was the only industry, apart from Pullman car porters, to do so. Right into the 20th century various states won the right to exempt the restaurant industry from minimum wage legislation. There is now a massive campaign across the United States - One Fair Wage - to seek the removal of that exemption for the restaurant industry and ensure tips will be seen as a gratuity and not as part of the wages of an employee. That is the context in which this important Bill has been put before us.I would urge colleagues to read Jayaraman's book, Forked: A New Standard for American Dining, which sets out the history of tipping and the implications, not only for the restaurant industry but for society, where tipping becomes acceptable as a replacement for wages and where employees are not respected within an industry and are not paid fair wages. We do not have the same practice here where restaurants are exempt from the minimum wage, and yet what we have seen is the widespread usage by employers of tipping as a supplement to or a part of wages and that is what this Bill is seeking to avoid. The Bill is to ensure that employees are entitled to keep tips as a gratuity on top of wages, and that employers cannot withhold them for spurious reasons. Senators who have any knowledge of this area will be aware of how important this is for the many people working in the industry.
In the US, ROC United has produced a diner's guide to highlight the good practice of many employers which treat tips purely as gratuity, which pay fair wages and which do not withhold tips or service charges. There are now incentives being built in for good practice employers so that they are not undercut by employers who are withholding and depriving workers of tips. That is a positive initiative. It is name and fame rather than name and shame. My party used that language with the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill 2017, as the Minister will be aware, to ensure that there are incentives for employers which are adopting good practices and which are seeking to ensure robust workplace practices for the protection of workers.
I am sorry for indulging the patience of the House a little on Report Stage. This is an important Bill and I urge colleagues from all sides of the House to support it. I commend Senators Gavan, Nash and all those who put this important Bill forward.
While this matter of tips might seem trivial, and sound silly, it is crucial to the welfare of the many people employed in the hospitality sector. I welcome the people in the Gallery. I was not aware that so many trade unions were represented. I would say to the Minister that there are many people involved in the hospitality sector and the public gives tips on the understanding that they go to the staff and will not be frightfully pleased with Fine Gael if it takes the nasty step of trying to deprive these people of their legitimate tips.
They should not be taxed at all. Why should they? It is a gift. One gives something to an employee to say, "Thank you so much for being so efficient and so nice." I thank the people in the Gallery for the courtesy with which I have been routinely met in every restaurant I go into.
I go to restaurants a lot on the north side. I do not go to a huge amount anywhere, but I do go on the north side. I go to Chapter One, which is a superb restaurant with a Michelin star. I go to the Kingfisher, which is a little more down market but serves wonderful scampi. I was in there just the other day and there was a wonderful waitress. She was so full of good humour, I asked was she like this all the time. "Oh yes. I have a happy nature," she said. It was absolutely lovely.
Yes, I am happy. It is a great blessing. I have never suffered from depression.
I was a long time in Trinity and I am sorry to say I never worked in a restaurant. In fact, I never did any work when I was a student, except reading my books which is what I thought I was supposed to be doing.
I was very privileged. An awful lot of the students used go to America, and they lived on tips. In France, if one neglects to give a tip, one will find a waiter or waitress coming after you saying, "Service, service, service." They will not let one away with it. One is compelled to give a tip.
I will tell the Minister something, and it might be a practical suggestion to my colleagues in the House. I always give the tip in cash right into the hand of the person who has looked after me, and to hell with the Revenue.
The people in the hospitality industry work unsocial hours, until 11 p.m., midnight, etc., and they should get their just reward for this.
I would also say, and perhaps I suggested this earlier, it is the intention of the person giving the tip that it goes to the employee to say, "Thank you for your service and thank you for your behaviour." It is appalling that restaurants, on top of the service charge, grab the tip. Let the record show the Minister, Deputy Regina Doherty, is nodding sagely and she obviously agrees with us. I am sure the Government will not vote against this Bill.
I know why the Government might be a little opposed to it, and that is because it yanked up the VAT on the restaurants. They want to compensate for yanking up the tax at the expense of low-paid workers. That is stingy and miserable.
Anyway, it is a political view and it is one to which I am entitled. I strongly support this legislation.
I thank the Leas-Chathaoirleach for his indulgence. Turning briefly to the subject of the amendment, this is a matter of definition. The definition of "employee" was left out of the Bill and it is an appropriate amendment. It is no harm in a Bill, when one is dealing with the rights of employees, to know what definition of employee one is using.
I welcome the Minister to the Chamber. I commend my colleague, Senator Gavan, on bringing this legislation forward. It is a vital piece of legislation. I also welcome all the guests, who have worked hard on this legislation. I would love if the Minister could support this. I really would.
I have worked in the industry. Some 35 years ago, I was a separated mother with two very small children and the tips were the difference for me in buying a bag of coal to heat the flat I was in. Thankfully, I had the support of my mother who was able to look after my children when I went to work as I was on my own with them. That is what happens today for workers. It was a question of whether I would be able to afford a bag of coal to keep the flat I lived in warm for my children while they slept. There was no central heating, as one can imagine, in those days in a very cold old house, and it was the difference. Every single penny counted. No doubt workers today who are on a minimum wage depend so much on those tips. It is a vital piece of legislation. Even today, when I go into a restaurant I always make sure I leave a decent tip. To think that it may not be going to that person who has served me is just wrong. I would love if the Minister would support this legislation.
I also want to speak to the amendment, if that is okay. The proposed change-----
I know, but I just had to say that. I merely wanted to express the importance of this legislation.
The proposed change clarifies that we are drawing on the Organisation of Working Time Act 1997. As I see it, we are also building on that work. That legislation outlines crucial workers' rights protections, including maximum working hours, mandatory rest times, annual leave requirements and complaints procedures.
These are victories won over decades, in large part as a result of the trade union movement and those fighting for fairer conditions for working people. They were not won easily but they have greatly improved the lives of people all over this country. I see this Bill as a continuation of that tradition.
As legislators, we need to assess how the employer-employee relationship is operating in practice, highlight instances of injustice and unfairness, and then legislate to tackle that where possible. That is what Senator Gavan and his Sinn Féin colleagues have done. I commend the Senator for his hard work in preparing this legislation. The Senator has my full support.
In reality, it is quite a minor step. We are not reinventing the wheel here. We are simply saying that workers in our hotels and restaurants should have the right to keep their hard-earned tips. It is a small change but it is very important to people who are working on low incomes and in precarious conditions who often rely, as I did, on tips to make ends meet.
Most Irish people would agree with this legislation. I would imagine that every person one talks to would say, "Of course, they have to get their tips." It is not rocket science. It is plain common sense.If the Minister agreed to the proposal, it would be fantastic. The Bill has been ready for a number of years and we should progress it today. Will the Minister support it?
I commend my colleague, Senator Gavan, on all the work he has done on the matter, as well as Senator Nash. I also commend those in the Gallery and others, some of whom I know from Galway and elsewhere. The Bill has been a collective effort and its passage seems to be a no-brainer.
I was surprised because I have worked in the hospitality sector. I worked for employers with the utmost integrity and it had never occurred to me that employers took tips from employees. When I was an employer in the hospitality sector, I would not have dreamed of pocketing the staff's tips. It must be stopped. It would be a positive step for us to take as a State, not least for tourism promotion and so on, if we could say we have a law that ensures that when a tip is given, one can be assured it will be given to the people serving and preparing the food, or whoever else it might be. We should embrace the Bill. I cannot understand why the Government fails to support it.
Senator Black spoke about low-paid workers within the hospitality sector. An average hotel room in Dublin tonight costs €405 for one night. People are making a great deal of money on the backs of low-paid workers. When I visit a restaurant, I want to know that the tip I give will be given to staff members. People should make their choices based on whether tips are given to staff. It is certainly how I will choose which restaurants I visit.
I was just about to deliver my greatest address in the Chamber but you have called me out on it.
I welcome the Minister and everyone in the Public Gallery who has been mentioned. There is no legal, technical or legislative impediment to supporting the legislation for the Government's colleagues in this House or in the other one. The strength and beauty of the legislation is its simplicity. It is succinct and direct but it hopes to achieve a great deal. The most powerful statement I heard at yesterday's briefing in the audiovisual room was that if a person is given precarious pay, it will lead to a precarious life. Thus far and on earlier Stages of the debate, we have spoken about staff relying on tips, which they need to make up the difference in their income because they are in precarious, low-paid work. That is the case, however, only when they receive the tips. We need to remember that much of the time, they do not even receive the tips, which is the whole point of the legislation.
Dublin city's tourism and hospitality sector is thriving. The remarks of Senator Conway-Walsh resonate with me and any of us who must travel to this city for work, where quite the buck is to be made in the hospitality sector. On Friday morning, I will travel with the Joint Committee on Justice and Equality and, as a result, I was planning to stay the previous night in Dublin to facilitate the journey. A large conference is taking place in the city tomorrow. While I do not know what it is, it is doubtless having an impact on the availability of accommodation. To stay one night - Thursday, 13 June - one fairly standard, corporate or business hotel in the city quoted me £936 sterling. It is not the case, therefore, that such hotels do not have the ability to pay their staff; they do.
The elephant in the room, however, is that they will not do so and choose not to do so. They pocket and steal the tips and keep them from the people to whom, as Senator Norris rightly said, we want to give a tip. We want to acknowledge their hard work. In a modest way, we also wish to extend a degree of solidarity, knowing full well the precarious nature of their work. As we progress the legislation and the debate, we must acknowledge that the other elephant in the room is a section of the political class which deems it okay to exploit workers or that a hotel provider can charge £936 sterling a night on a day when a conference is taking place in the city, while an immigrant working in the front of house cannot keep his or her tip. That goes to the heart of the opposition to the legislation. It is an ideologically driven approach that backs the bosses but not the workers because some politicians do not care. That is the greatest shame, which is why I urge colleagues across the House to reflect not only on the simplicity and the ability of the legislation to be passed but also on the profound impact it will have on social and economic justice for those in the hospitality sector.
The other Independent Senators and I have collectively discussed the Bill and will strongly support it. The amendment, which will extend the definition in the Organisation of Working Time Act 1997 to the term "employee" when it is used in the legislation, is necessary and good.
The Bill will create an offence and empower the Minister to make regulations. Those two provisions are being relied on in respect of the Control of Economic Activity (Occupied Territories) Bill 2018 as amounting to incidental expenditure for the purposes of allowing the Government to veto that legislation under the Standing Orders of Dáil Éireann. While I will not bother the House at great length on the matter, I recently had the opportunity to study in detail the provisions of the Standing Orders of the Dáil, which is a matter usually for that House, and the provisions of the Constitution which it is supposed to reflect. I have come to the view that the Government is wholly wrong in attempting to use the money message veto in respect of a Bill simply because it either creates the right for a Minister to make a regulation or creates an offence which, if it was committed, might or might not cost money to prosecute. Somebody has to call out the Government on the matter because it abuses the Standing Orders of Dáil Éireann.
Under the Constitution, this House has the right to initiate legislation. The money message veto was used in the other Chamber but the Bill before us fits exactly the same criteria. It will create an offence and require the Minister to make legislation. The threadbare and utterly unacceptable suggestion that it involves appropriating the public revenues and that, therefore, it would require a message from the Taoiseach is simply not true as a legal proposition, about which, I hope, one will hear more in the fullness of time. I say this in case anyone believes that it does not matter what the Seanad says or does because the Government has a veto. That is a spurious and misguided proposition which somebody somewhere seems to have taken on board without considering the legal implications.As a House, we must protest about our Bills effectively being stymied in another House, not by the will of that House but by the will of the Executive. We must stand up against it. It is strange that in this House we do not have any such inhibition on our legislation other than Standing Order 41, the amendment provision Senator Norris referred to, but the other House can be vetoed by the Executive on an utterly spurious and unstatable legal ground. I will not put it any further than that. I want to make it very clear that from now on, I will protest about this at every available opportunity because what is happening in the other House is unlawful and must be resisted.
I congratulate the Members who have brought this Bill to this Stage and those who have assisted them from outside. When a customer pays in cash, as Senator Norris suggests, there is very little an employer can do to get the cash out of the employee's pocket.
However, our society is transforming increasingly to a cashless society where payments are made electronically and through credit cards. It is wholly wrong that this entirely positive development and transformation in how we live economically is used as a licence to plunder workers' pockets.
That is compounded by the fact that people who receive gratuities are usually working at the coalface in various service industries like hospitality, where wages have consistently been low. It is about time this legislation was passed. If the Government has its own legislation in mind, what is wrong with letting this Bill pass this House, bringing it to the floor of Dáil Éireann, moving whatever amendments it feels are required and persuading the majority - which is not a Government majority in either House - that its legislation has merit?
The Government of the day took the then Deputy Alan Shatter's Private Members' legislation and ran with it. Why not run with this vehicle? What is so objectionable about it? Is the problem that the legislation comes on yellow paper and does not have the name of a Minister written on the back? If there is something wrong with the Bill, the Government should cure it. The Government cannot simply say it has its own proposal. That simply does not wash any more from a Government which has not acted on this matter for a long period and does not have a majority in any event to push through its own legislation or amendments. It is dependent on the goodwill and support of others to get any legislation through. I know the Minister does not like being portrayed as Ms Scrooge and I am not going to do that. However, I will ask the Government to get real and to look at the realities of the situation. This legislation would-----
No, Mr. Scrooge's sister-in-law.
We have to face up to the fact that this is an unusual Parliament. The Government is in a minority. The will of the great majority of Members of this House is for this legislation to be passed. I dare say that when the Bill is brought before Dáil Éireann the will of the great majority of that House will be for it to pass. Why resist it? If the Government has problems with any part of it, why not put down amendments on Committee Stage in Dáil Éireann and see in the Committee and Report Stage debates if the Government's arguments stand up and whether a majority of the Members of that House agree? The Government should stop obstructing what is clearly fair and just legislation. That is my appeal. I am not saying that the Minister personally has an animus against workers or anything like that. I have been a Minister. This refusal is innate departmental conservatism. Departments do not want anybody else's legislation. They want to come up with their own. I did this myself in my time.
I know, and the Leas-Chathaoirleach always does so. I welcome the Minister back to the House. This is not aimed at her in any way. I know that she and many others have concerns abut the Bill. As Senator McDowell said, I call on her to let it pass and go before the other House where Members can table amendments if there are concerns.
I am not making a Second Stage speech or anything like that but I have concerns about how the legislation will operate. Many employers are good and many pubs and restaurants are fine. We are legislating for the hard cases. There are people who abuse the situation and effectively use tips to fund the wages of their staff rather than giving them to staff in addition to wages. Many of the people in this sector are at the lower paid end of the labour market. They are often in precarious employment. They are often vulnerable and may be in part-time jobs. These workers include students who are working to get through college. In many cases, they are working to feed a family and keep a household budget going. As a collective, we all want to make sure that tips reach their intended destination. It is important for the tipping policy in any restaurant to be transparent, whether it is compulsory or voluntary or applies to groups of more than six or ten people. A restaurant, pub, hotel or any other establishment should have a policy and people should know what that policy is in the interests of fairness. As was referred to, the cashless society is becoming a much bigger deal. Many people will give a cash tip if they pay by credit card but some people do not. There is also a concern about where the tip ends up.
Equally, there are concerns for employers. Will this system become very bureaucratic and expensive? Will employers need a staff member to administer it? By and large, employers do not want to get involved. They worry about tips becoming taxable income, as they probably will if they are recorded. This tax will be additional to employer pay-related social insurance, PRSI, obligations. We could end up with a situation where workers are worse off in the end. That is certainly not the intention of the Bill but I am concerned that it could be an unintended consequence. I certainly do not want that. As a party member, I am happy to let the legislation pass. It is a very sensible suggestion. The Minister may not be in a position to do so but I call on her to let it go to the other House and persuade Members there of the merits of any amendments the Government wishes to introduce. It is everybody's intention that hardworking people, often on minimum wages, who earn tips based on their service should receive them. They are a gesture of appreciation of the extra trouble they have gone to. Not everybody tips but I am sure lots of people do, and they mean for the money to go to the person they want it to go to. Pubs and restaurants have different systems in place. Some places pool tips, some share them with kitchen staff, some pay barmen extra because they do not get tips and so on. We do not want to over-legislate for this, which may not be possible. This is very well intentioned legislation. I commend Senator Gavan and his group on putting it forward and raising an issue that I did not realise was as big as it seems to be. Perhaps I am naive but I assumed that tips go where they should go.I always try to ensure that if I give a tip, it does go to the right person. There is a problem with certain establishments when it comes to credit cards. One of them, which is not too far from here, has been the subject of a lot of coverage. I do not know how valid that coverage is but it is probably a case of there being no smoke without fire.
Rather than dividing the House, perhaps the Minister could accept the amendment. It will probably be passed in any event but perhaps the Minister could accept it and bring it to the Lower House where it will be dealt with. I again thank Senator Gavan and his group for putting forward the amendment and highlighting the issue. My party and I are happy that there is a transparent system and that people who earn tips should benefit from them.
Since everybody else has welcomed the workers and their representatives, I will also welcome them, particularly Mr. Shevlin. I hope Ratoath's residents treated him well on Sunday. He is welcome back any time. I wish to focus on the people who have championed this cause over the past number of months. That goes for Senator Gavan as well because the intent behind this Bill is honest and displays integrity. It is important to say that because the aim of this Bill is the same as what I will propose at the end of this little ramble.
I also hope to set out the reasons I cannot support the Bill. I appreciate that Senator McDowell might want to tar my reputation by referring to level of standards to which he aspired when he was a Minister. However, I certainly do not feel that I have a monopoly on wisdom and I do not have a particular penchant for having my name at the end of a Bill as long as it does exactly what we intend it to do. The Senator tarring me in that way is a bit disrespectful. While I accept that we are all on the same page and all want the same thing, I will outline the reasons why I cannot support the Bill.
In the first instance, we should address suggested definition contained in Sinn Féin's amendment. The proposed insertion of the definition of "employee" contained in the Organisation of Working Time Act into the National Minimum Wage Act would be confusing and impractical because one Act would then contain two definitions of a single term that were developed for different purposes. That is almost irrelevant and we could fix it but it is the basis on which I am opposed to the amendment.
I am also opposed to the Bill in its entirety. Clearly, the Bill is honest in its intent. It seeks to provide additional protections for employees working in the hospitality sector and other sectors who depend on tips in order to reach a decent standard of living. Senator Gavan obviously thinks it winds me up that Fine Gael is opposing the Bill. It is not Fine Gael that is opposing the Bill, the Government - including a number of Independent colleagues - is opposing it. We are not opposing the Bill purely for the sake of doing so because we have been we were engaging with the Senator. He is aware that we asked the Low Pay Commission to conduct a review of current practices on tips and to report back to me and to the Houses with its findings and what it considers to be necessary in order to effect change. It is not fair to state that we have not acted for eight years. The Senator's Bill was only published two years ago. We engaged with him on Second Stage and said that we would engage with the Low Pay Commission, which we did. The commission consulted extensively and returned with a very detailed report. I wish to place on record the fact that I have the utmost respect for the members of the Low Pay Commission, as, I hope, everybody else does.
The conclusions of the Low Pay Commission's report were unanimous and strong. We are all aware of the representative bodies that make up the commission.. The commission consulted widely and has representation across all stakeholders, including union representatives, worker bodies and industry. It advised me strongly against introducing a heavily regulated regime in this area or primary legislation. It warned me that legislation would be unworkable from an adjudication perspective and from the point of view of enforcement. That point was reiterated by the Workplace Relations Commission, which is the body that would have to enforce this legislation if or when it is passed. I have been informed that the legislation is unenforceable.
The Low Pay Commission also warned that there would be unintended negative consequences for people in the industry who, in the main, are lower paid workers. Those consequences include the reclassification of service charges, which could lead to a reduction in people's take-home pay. Regardless of whether one calls it the money they get through the PAYE system, the wages system or what they take home as cash in hand, if we pass this Bill, that will be no more and there will be a reduction in take-home pay. I do not believe any Senator or anyone in the Public Gallery expects or wants that to be the result of this Bill being passed. It would be unwise of all of us if we were to ignore recommendations of the Low Pay Commission.
It is because of that, the context of the recommendations and the work and intent behind what the Senator is trying to do that I have come up with the new proposals I outlined to his party leader in the Dáil yesterday. I have considered the Low Pay Commission's report and listened genuinely to the concerns of the union representatives and others who came to meet me. The Senator is right - I meet a wide variety of stakeholders because my job involves doing so. It is not my job to side with anybody, although that is a charge which, for some reason, the Senator seems to throw in my face all the time. Regardless of whether it is me or somebody else in the role - it could be the good Senator in the future - it is the Minister's job to provide independent legislation that is robust and that actually does what we all want it to do. It was on this basis that I met a wide range of people.
What we propose to do is amend the Payment of Wages Act 1991 in order to ensure that it will be illegal for tips to make up or satisfy any part of a person's contractual hourly, weekly or monthly wage. We will also provide in law to place a requirement on employers to clearly display for the benefit of workers and patrons of these establishments their policy on how tips, gratuities and service charges are distributed. This must be in clear public view and will be subject to an inspection regime of the Workplace Relations Commission. My Department will monitor the effects of the legislation as it is bedded down with a view to carefully considering whether there is any further legislation that will arise from the passage of those pieces of Bill if it is necessary. By limiting the scope of the legislation in this way, we will support low-paid workers and workers in precarious situations and avoid the pitfalls the Low Pay Commission suggests will arise if we pass the Bill before the House. The heads of the legislation to which I refer are being drafted by my Department officials and I will bring a memorandum to Cabinet shortly.
The Senator mentioned the simplicity of his Bill on a number of occasions. That is probably the real reason I cannot support it. It is anything but simple. There are a number of reasons for this, including technical issues that will make it unworkable. Senator McDowell made the charge that I would not work with this Bill. It would be far easier to amend the Payment of Wages Act and produce exactly the same outcome as spending an awful lot of time trying to amend the Bill in order to get the desired effect. For argument's sake, the Bill proposes to amend the National Minimum Wage Act in a way that fails to distinguish between tips and service charges despite the fact that the National Minimum Wage Act does distinguish between them. That distinction is really important and if it is not clear in the Bill, the calculation of a person's minimum wage will come under scrutiny and employers will be required to do exactly the same with tips as they do with service charges, which is a perfectly legal arrangement. This would mean that all tips, be they cash or through the trunk system or however they are paid, would have to go through the PAYE system and, ultimately, everybody who works in the hospitality sector would end up earning less. I could not stand over that. Senator Gavan is right to state that all income is taxable. However, as Senator Norris observed, gifts are different. Unfortunately, in this country, gifts are not different. They are all treated as being taxable, which is why we have gift tax. As a result, every form of income is taxable as far as the Revenue Commissioners are concerned but the difference is that under current practice, people who receive tips are responsible for declaring them at the end of the year. If this Bill passes, that will immediately become the responsibility of the employer and people's entitlement to receive, in full, the tips they currently receive will be taken away just to try to fix a problem relating to a few rogue employers who need to be brought into line by means of new legislation.However, we would end up having the unintended consequence of everybody who relies on tips earning less. They would also then be subject to having those earnings, from a PAYE perspective, increased which would have an impact on their housing assistance payments, HAP, medical card applications and working family payments. Their income would be perceived as being more, although their take-home pay would be less. It would have a disastrous effect on the application of all social welfare benefits.
My Department and I have met several bodies from the hospitality industry. I was pleased with the response from these bodies, including the Irish Hotels Federation, along with the taxi, restaurant and hairdressing representative associations, and their co-operation in providing a code of practice with regard to displaying policy on tips in establishments. There are no interested parties, including those with first-hand testimonies, in allowing the more undesirable practices which exist in the industry. As for Senator Gavan’s case of a young lady in Limerick, once the payment of wages legislation has been passed, no more will she have to take that sneering from her employer and that she has no rights to her tips. She absolutely does. More importantly, that employer should be wary of the State coming after him. The undignified way the employee in question has been treated is the reason we need to have an inspection regime and make a change to the Payment of Wages Act.
The proposals will tackle head on the main issues in the industry, namely, that employers are unfairly taking tips to which they have no right. We will make it unlawful for them to do that through sanctions. We are proposing to put an end to the lack of transparency for customers. As Senators pointed out, many customers assume their tips, either through card payments, cash or service charges, go directly to the employees. We need to ensure there is transparency in policies, as well as an inspection regime to ensure these policies are upheld.
Transparency will send a strong and positive message. It will have a proper impact on how patrons, employers and employees will behave. Most employers want to do the right thing. For those who do not, however, I hope a clear message will be sent from all of us that we will not tolerate employers taking employees’ tips. We will pass legislation to ensure they do not but it will also be simple legislation to ensure there are not any unintended consequences. We must also ensure that those who rely on their tips get to bring home those tips to which they are entitled while ensuring they do not end up in the back of the taxman’s coffers.
I thank the Minister for her response.
Where to begin? I will begin with the Low Pay Commission report. The representatives on the commission from the Mandate trade union and ICTU are here today in the Gallery. They have written to the Minister and all Senators calling on the Government to support this Bill. Their position could not be clearer.
It was a bizarre report.
It stated no research was done and in the next sentence stated it would not do any either. Fortunately, Deirdre Falvey did research for The Irish Times. Apparently, it is one of the most read articles published by the newspaper this year. It found the major restaurant chains put on between 5% to 15% service charges which they then pocket.
What those in the Gallery have already clued into is that the Minister’s proposals - at this late stage as we have had the Bill for two years - will not deal with the central point, namely, hospitality workers deserve a right to their tips. They do not currently have one. Our Bill will do that.
The Minister’s interpretation of the taxation rules is quite bizarre. I hope Senator McDowell will not mind me saying but I was encouraged that it was his view as well. The Minister is just incorrect about taxation. This proposal gives a legal right of redress. It does not change the fact that for tips given in cash, it is up to the employee to declare those. It does not change the fact that tips on credit cards already pay tax which will not change either.
The other point the Minister seems to have forgotten, which suggests to me that she is not as close to this issue as she needs to be, is that most of the workers in this sector do not earn enough money to pay any tax. Are we serious about helping these workers? This Bill seriously does. I welcome comments from Senators Horkan and McDowell and other Members because they are saying, with one voice, let the Bill pass. I would be happy to keep this cross-party consensus going and work with the Minister to address any concerns she has. We have looked at the Bill thoroughly and know there are no tax implications. Rather than Fine Gael taking a stand to deny hospitality workers a right to their tips, the Minister should work with us.
Ivana Bacik, Frances Black, Rose Conway Walsh, Gerard Craughwell, Mark Daly, Paul Daly, Aidan Davitt, Joan Freeman, Robbie Gallagher, Paul Gavan, Alice Mary Higgins, Gerry Horkan, Kevin Humphreys, Colette Kelleher, Billy Lawless, Pádraig MacLochlainn, Ian Marshall, Michael McDowell, David Norris, Pádraig Ó Céidigh, Niall Ó Donnghaile, Aodhán Ó Ríordáin, Marie Louise O'Donnell, Lynn Ruane, Fintan Warfield.
Colm Burke, Paddy Burke, Jerry Buttimer, Maria Byrne, Paul Coghlan, Martin Conway, Anthony Lawlor, Gabrielle McFadden, Michelle Mulherin, Catherine Noone, Kieran O'Donnell, John O'Mahony, James Reilly, Neale Richmond.
Applause is not allowed in the Chamber. Members should know better, as should those in the Gallery. They must respect the House. There is a way out which I do not want to use. Senator Lawlor should not tempt me. We either have respect for the Chamber or we do not. Those who want to applaud can go to a football match.