Back in August I wrote this piece All the fun of the fair – new tips Code offers bumpy ride to service-sector employers (UK) about the difficulties inherent in trying to mandate “fairness” by statute. I made reference to the then pending non-statutory guidance to supplement the statutory code on how to distribute gratuities under the Allocation of Tips Act 2023 and, I must now confess, expressed some scepticism as to its likely usefulness. The guidance is now out (just in time for the Act to come into force today) and, well, I was wrong. The non-statutory guidance is not just not very helpful in providing a steer on fairness, but actually of no help at all. 

It does not deal with what fairness means in that context. It does not help the hard-pressed employer, under fire from every corner of its bar or restaurant, to sort out the competing demands for special consideration for different groups of its employees or particular individuals who feel that they have gone above and beyond. It does not include any guidance to affected workers along the lines that fairness is not theirs to decide. It does not recognise that in doing its best to please all the people all the time, the employer will absolutely inevitably make judgments on the margins which, surgically dissected in a Tribunal a year or more later, could be said to work a little harshly on someone. There is no suggestion in the guidance that this may not be actionable unfairness but, just another stitch in the rich tapestry of life and probably more than balanced out by your having received in another month a somewhat greater share of the proceeds than your work actually deserved. There is no attempt to explain the true “blunt instrument” nature of an employer’s discretion or to manage expectations in any way. Instead, a reader is left thinking that he/she has a simple right to absolute fairness of allocation of tips, untrammelled by reality in any way. 

So what do we have in the guidance? 

• A reminder that employers should take their agency workers into account when considering the distribution of tips. As to how, we are not told. It does not seem unlawful to pay an agency worker a smaller share – “what is fair varies depending on the specific circumstances of the industry and the employer”, it says, and “it is intended that agency workers are not unduly disadvantaged solely by virtue of being engaged through an agency”. Some disadvantage is therefore seemingly okay, perhaps if the agency worker is known by the employer to be on a higher basic than its permanent employees in similar roles or there is less need to retain and motivate them.
• No pooling of tips between difference branches or “multiple sites of operation” of the same employer.
• Tips should be distributed only to those workers who are “involved in directly providing service to customers”. The non-statutory guidance refers to having “interaction with customers during service”, but that cannot really be the test because it would exclude kitchen staff who are clearly intended to be covered. Door-staff, cooks and bottle-washers, waiters, bartenders, all yes – HR, accounts, procurement, cleaning, maintenance, marketing employees, probably not.
• There is a template for workers wishing to see their tipping record and another for employers responding to such a request.
• We see a chilling reminder that for no obvious reason at all, the limitation period for making a claim about unfair allocation is a full 12 months from the payment complained of (three months for a failure in relation to tipping records). Put differently, that is four times the limitation period applicable to claims for non-payment of sums to which you did actually have a right.

However, 12 months or 3, the bigger issue underpinning this Act, a problem this guidance has wholly failed to address, is that it encourages litigation which may take years and cost employers thousands in relation to tiny sums (there is no minimum threshold of financial disadvantage required) based on intangible legal principles of unknown interpretation. Employers in the hospitality and leisure sectors deserve so much better than this.