Unite, the leading union representing hospitality workers, has criticised the Labour government for climbing down on a pledge to hand full control of tip allocations to staff in the sector.

Labour had previously pledged to give workers control over how tips would be allocated as part of the Employment Rights Act.

However, the government has climbed down, removing its plans to hand over full control of tip allocation to workers. Instead, it has released a fact sheet explaining the changes which includes insulting language such as “the tyranny of majority of workers” that demeans collective bargaining and wrongly suggests that workers with protected characteristics could lose out from a workers’ tips policy.

Unite also believes the latest law change leaves workers more vulnerable to losing their hard-earned tips, as it puts the onus on guidance and consultation rather than a firm policy on collective bargaining and fines for employers that keep tips which Unite has been calling for.

Unite general secretary Sharon Graham  said: “The government’s fact sheet is wrongheaded and offensive to hospitality workers, it needs to be withdrawn and redrafted.

“Using language such “the tyranny of majority” of workers, totally fails to appreciate the employment conditions of hospitality workers. The dangers of discrimination and unfairness will come from imposing a tips policy without the workers’ voice.

“The suggestion that vulnerable workers would be disadvantaged by a workers’ tips policy is simply insulting. Many workers in front of house positions are low paid, young, women and migrant workers.”

On 1 October 2024, the Employment (Allocation of Tips) Act 2023 came into effect, making it mandatory for all tips, gratuities and service charges that employers have “control or significant influence” over to be passed on to workers in full.

This would ensure that workers in venues such as bars and restaurants would keep 100 per cent of their tips. However, employers were still able to decide which workers received tips, with many using it to supplement the wages of managers and back office staff.

The new Tightening Tipping Law, coming into place in October 2026, will mandate that when employers draw up a tipping policy they must consult the workforce, ideally through a trade union or elected representatives before publishing this. These measures will be enforced via the employment tribunal

system. Unite believes this law change also puts the onus on consultation or guidance rather than strong collective bargaining, which means employers can effectively decide who will receive tips and use it to supplement the wages of staff not directly involved in providing a service to customers. It also places a burden on workers to enforce their rights through employment tribunals, an unrealistic expectation in a sector where job security is fragile and retaliation is common.

Through its ongoing Fair Tips, Fair Pay campaign, Unite has been calling on Labour to strengthen the 2024 act, after finding several ways in which unscrupulous employers were holding on to tips. These include third-party deductions and employers treating service charges as company income rather than distributing them as tips.

Unite hospitality lead organiser Bryan Simpson said: "The strongest antidote to unscrupulous practices such as tips theft isn’t consultation - it’s collective bargaining.

"Real power comes from giving workers the right to organise, negotiate and win the pay and conditions that they deserve. All this U-turn will achieve is hurting hospitality workers by allowing employers to still manage tips unfairly - Unite will carry on campaigning and organising until tips theft becomes a thing of the past.”

ENDS

Notes to editors

Through the Fair Tips, Fair Pay campaign, Unite has called on Labour to strengthen the 2024 Act, including

Bringing in an outright ban on all deductions - no admin fees, no employer skimming, no 'cost recovery' clauses.

A statutory right for workers to elect tronc masters and committees, with clear protections against employer interference. A tronc is a central pool for payments made to employees at work.

Real-time transparency - tips must be itemised and paid with wages, not weeks later.

Stronger legal rights for unions to access workplaces and gain recognition in sectors where tips are routinely stolen.

Collective enforcement rights  - unions must be able to bring claims on behalf of groups of workers, reducing the burden on isolated individuals.

The introduction of fines and penalties that make it more costly for employers to break the law than to comply.

For media enquiries ONLY please contact Unite press officer Natasha Wynarczyk on 07970081524

Email: natasha.wynarczyk@unitetheunion.org