New clause 6 - Tips, etc., not to be taken into account
Employment Relations Bill
10:45 pm
Mr Bill Tynan (Hamilton South, Labour)
I beg to move, That the clause be read a Second time.
Although the new clause is simple, it would be effective. Although it stands only in my name, I am confident that many Committee members would support it if it were pressed to a vote. I hope that the Minister will accept it.
I wish to pay tribute to my hon. Friend the Member for Falkirk, East (Mr. Connarty). He promoted a ten-
minute Bill in July. Here we are, nearly a year on, and there has been no progress in the matter. There is an ideal opportunity to insert a new clause in the Bill. I hope that the Government recognise the blatant unfairness of the existing legislation.
Nearly 2 million people in the service industry receive tips from people in one way or another and they could benefit from the new clause. Individual or pooled tips or gratuities should be paid either to the individual or the group. The employer should not be able to use them to subsidise the national minimum wage.
I speak from personal experience. A long time ago, when I was a young child, my sister worked in the service industry as a waitress. In the evening, my parents had to wait to see how much tip money she brought home in order for us to be able to eat the next day. That is how serious the situation was in those days. I am not saying people are in that position now, but they could be. We should look at the matter seriously.
My hon. Friend the Member for Falkirk, East spoke about head waiters being able to take 80 per cent. of the gratuities or tips before dividing the other 20 per cent. among the staff to whom the customers believed they had made a contribution. That needs to be highlighted. It is important. The National Minimum Wage Regulations 1999 state that
''service charge, tips, gratuities or cover charge that is not paid through the payroll''
are excluded from payments toward the minimum wage. That means that other tips are counted towards it. The consequences for 1.8 million people working in the service industry, 67 per cent. of whom are women and 40 per cent. of whom are under 25, are significant. Some 1.8 million people may not be getting what they are entitled to. There was a case that went to the High Court, which decided that the ownership of tips through cheque and credit cards first passes to the employer. That judgment was incorporated into the National Minimum Wage Act 1998 and the 1999 regulations. However, the case was thrown out by the European Court of Justice.
I ask the Minister to look seriously at changing the legislation and adopting the new clause to rectify the injustice and unfairness that happens at present. Nearly 2 million people could benefit. It would be a wonderful plaudit for the Government, along with all the other plaudits that they get, to introduce a new clause of this nature into the legislation. I seriously hope that the Minister will accept the new clause.