For many employers, particularly in the retail and hospitality sectors, the Government has offered a welcome reprieve to the introduction of rights to predictable working patterns that were due to come into force in September 2024, saying those rights will not be taken forward at least in their current form. However, the new rules on ‘tipping’ will come into force in October 2024 as expected.
Allocation of tips
From 1 October 2024, employers will be required under the Employment (Allocation of Tips) Act 2023 to ensure that tips, gratuities and service charges are passed on to their workers without deductions, and distributed among them in a fair and transparent way. Employers will be required to have a written policy on dealing with tips and will also need to maintain a record of all tips received and distributed in the previous three years. Workers will have a right to see an employer’s tipping record.
The new legislation is supported by a statutory code of practice which sets out the key principles of fairness. The code:
- notes that allocating and distributing tips fairly does not necessarily require employers to allocate the same proportion of tips to all workers and there may be valid reasons why certain workers are allocated a larger share of the tips received;
- recommends that employers should use a “clear and objective” set of factors to determine the allocation and distribution of tips. The code suggests that those factors may include (i) the type of role (e.g. front of house and backroom workers), (ii) basic pay rates, (iii) hours worked, (iv) individual and/or team performance, (v) seniority/ level of responsibility, and (vi) customer intention; and
- suggests employers should consult with workers to seek their agreement that the system of allocation and distribution of tips is fair, reasonable and clear.
With respect to troncs, the code notes that where an employer uses a tronc (which is permitted under the new legislation), its arrangements must be in line with the principles of fairness set out in the code and the employer must be satisfied that those arrangements are operating independently.
For further information, see the latest edition in our Hospitality Matters series and our Law-Now Tip-top: new legislation on tipping.
Predictable working
The Workers (Predictable Terms and Conditions) Act 2023 was introduced under the previous Government with the purpose of giving workers and agency workers the right to request a predictable working pattern in the light of recommendations made in the Taylor Review of Modern Working Practices in 2017.
The Advisory, Conciliation and Arbitration Service (“Acas”) subsequently consulted on an accompanying draft code of practice on handling requests for a predictable working pattern. This consultation closed on 26 January 2024 but a final version of the code was never published.
It has now been reported that the legislation will not be brought into force by the new Government which is, perhaps, a surprising development given their manifesto commitments in relation to workers’ rights.
Employers should, however, take note of the employment related reform set out by the new Labour Government in the King’s Speech in July 2024 which it has described as the “biggest upgrade to workers’ rights in a generation”. In particular, the background briefing notes outlined, in relation to an Employment Rights Bill, that the Government is committed to: “ensuring workers have a right to a contract that reflects the number of hours they regularly work and that all workers get reasonable notice of any changes in shift with proportionate compensation for any shifts cancelled or curtailed.”
An Employment Rights Bill has not yet been published although it has been promised in the Government’s first 100 days in office. Publication can therefore be expected soon, at which point the detail behind this proposed reform and the extent to which it overlaps with the abandoned legislation should become clearer.
For further information, see our Law-Now Workers’ rights to request predictable working.
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