Waiters win right to sue restaurants for withholding tips

Restaurant and bar workers will be able to more easily sue their employers for withholding tips under new laws set to be introduced by ministers.

More than two million hospitality workers are set to enjoy a pay boost from legislation that will ensure they keep all of their tips.

Workers will be given the right to find information on an employer’s tipping record, helping them to “bring forward a credible claim to an employment tribunal,” business minister Jane Hunt said. The Tipping Bill will ban businesses from keeping the service charge when diners pay on card.

The widespread shift away from cash has increased the number of businesses holding onto service charges for themselves when meals and drinks are paid for using credit and debit cards.

Casual dining firms including Pizza Express have been criticised for deducting a percentage from employees’ tips, though it has since stopped the practice.

The new rules will provide a wage boost to the UK’s 2.5m hospitality staff, including many who earn the National Living Wage. Union Unite estimated that staff were losing on average £2,000 a year in tips from the practice.

The clampdown could also tempt more to seek work in the sector as businesses are hamstrung by crippling worker shortages. There are a record 174,000 vacancies in the accommodation and food services industry, almost double the pre-pandemic level.

UKHospitality chief executive Kate Nicholls said the measures will provide a “significant and welcome boost to hospitality employees’ take-home” pay.

“This should also reassure prospective hospitality sector workers at a time when the industry is seeking to fill vacancies.”

Dean Russell, the Conservative MP who introduced the bill, said: “It has always felt wrong that some employers have retained tips intended for their staff. This new legislation will halt this practice, particularly given the current challenges around the cost of living.”

The UK has quickly shifted towards a cashless society in recent years despite fears of the impact on vulnerable groups, such as elderly people and those on low incomes.

Cash was used in just 17pc of all payments in 2020 and the number of ATMs has plunged by a fifth since mid-2018. The number of bank and building society branches has dropped by a third in the last 10 years.