Effective legal intelligence
Thursday 22nd June 2023 Tony Irving 

New rules for employers relating to sharing tips, gratuities and service charges

Amid the changes to employment law, even if not the bonfire of regulation hoped for by some, arising out of the Retained EU Law (Revocation and Reform) Bill currently going through Parliament the powers that be still find time for reform in respect of individual issues.

Together with statutes reforming redundancy and increasingly, in the employment context, carers’ rights we have the Employment (Allocation of Tips) Act 2023, expected to come in to force in May 2024, intended to ensure that workers (not just employees) receive their fair share of tips, gratuities and service charges however they are described. Employers are to have written policies about dealing with them and will be subject to obligations to make and retain records. A Government Code of Practice is awaited. According to Government figures the Act will increase take home incomes by £200 million per annum.

The particular interest of this legislation, for lawyers even if not for waiters, may lie in its enforcement provisions. Claims alleging breach of the Act will be dealt with by Employment Tribunals. Historically Tribunals, and come to that Courts, have dealt with the people and issues before them, rather than seeking to put the world to rights. A successful Claimant is awarded compensation by a Tribunal or damages by a Court. Third parties who wish to be compensated usually have to make their own claims.

This Act empowers the Employment Tribunal to make awards not only to successful Claimants but to workers other than Claimants. How the evidential difficulties inherent in calculating a loss sustained by someone who may have played no part in the proceedings will be dealt with remains to be seen.

Tony Irving is a senior associate at JPC specialising in employment law. Tony and the team can be contacted on Tirving@jpclaw.co.uk, tel 07717216568


All articles on this website do not necessarily cover every aspect of a topic and are designed for information purposes. Reliance should not be placed on their contents without specific legal and financial advice first being taken.

Back to latest news