Are Tips illegal???

DVardysShadow

Anihilator wrote: »

Legal evidence to back it up?

Yes please, it would be good if you did.

DVardysShadow

Anihilator wrote: »

Whilst I actually agree it should be the case unless its legally in the contract the employer can do what they want and an explicit instruction from a customer whilst it may mean they can't pocket the cash doesnt make it any more acceptable for the staffmember too.

If the money is given by the customer for staff, that should be the end of it and in the hospitality industries, although it is slightly grey, I think it is reasonably clear. If you argue it is not clear enough for the employee to be able to pocket the cash, it certainly is not clear enough for the employer to either. I think it is clear enough and there is no question of keeping a tip being theft in my mind

Many industries actually make the accepting of gifts a proper policy and discliplinary point.

Yes, usually where employees can influence the placing of contracts and orders. This is with good reason. Don't over generalise, no good comes of it.

Sparhawke

Anihilator wrote: »

Legal evidence to back it up?

Whilst I actually agree it should be the case unless its legally in the contract the employer can do what they want and an explicit instruction from a customer whilst it may mean they can't pocket the cash doesnt make it any more acceptable for the staffmember too.

Many industries actually make the accepting of gifts a proper policy and discliplinary point.

You have stated nothing to back YOURSELF up here, whereas at least us lot have tried to bring forth some evidence or at least have direct experience of having worked in this industry, where is yours?

And when is the original poster going to come back and see what carnage he has wroth? lol

Anihilator

DVardysShadow wrote: »

Yes please, it would be good if you did.

Employment Law

Please show a single law or case that states an employee who isnt specifically allowed to keep tips in the contract has been able to stop an employer keeping them.

Those in hospitality are bound by the same laws as those in care or any other jobs.

What about tipping a sales assistant in a supermarket? Would you count this as a case where the employee could keep it?

Anihilator

Sparhawke wrote: »

You have stated nothing to back YOURSELF up here, whereas at least us lot have tried to bring forth some evidence, where is yours?

And when is the original poster going to come back and see what carnage he has wroth? lol

Insolvency Act, Companies Act, Employment Law.

You have not posted evidence at all. The articles you posted do not apply here and even if they did you have completely misunderstood the context.

A company in administration has a duty to safeguard creditors. This means they cannot gift money away.

Tips are imo based on my understanding of the law in no way automatically entitled to staff who are paid to do a job unless their contract specifically allows for it. If an employer chooses to retain tips then they can do so but it certainly isnt very fair.

The problem is the law doesnt specifically state tips etc normally so its down to an individuals interpretation. As far as I can see there doesnt appear to be a relevant case law example so we can all debate all we want but ultimately we have our own viewpoints and its unlikely either can prove ours with damning evidence.

Back to the OP's point though. Based on this thread you can clearly see that it won't be an easy argument to win and you need to decide whether the loss of the tips is worth the hassle of pursuing it bearing in mind it may take a long time to win anything and the company will probably be long closed and liquidated by then with no assets to settle it - if you win.

I personally would ensure I was receiving NMW, make my stance clear and if I didnt change their mind grin and bear it or walk.

Bobl

I thought we answered this very clearly earlier on.

1. Service Charge, or any Tips paid by cheque or Card legally belongs to the business, and 'can' be given to the staff, minus tax but it not legally binding to do so.
2. Cash can be taken by the staff.

If the 'Administrators' (not the admin staff of the business) have money which has been given by cheque or card, made out to the business, then they have a responsibility to pay the creditors first. They do not have to pay employees.

zzzLazyDaisy

Historically employers have been allowed to keep tips and use them as a contribution towards the wages (though many employers did not take advantage of this). So the starting point needs to be the contract of employment or employee handbook which should set out clearly how the employer treats tips.

HOWEVER From 1st October 2009 an employer cannot use tips to make wages up to the National Minimum Wage, so an employee on minimum wage only is now entitled to receive the full amount of the tips in addition to wages. although they will still be liable for tax on the tips.

Presumably an employee earning more than the minimum wage falls under the old rules and only tips received in excess of the employee's wages would have to be paid over to the employee (I don't know if this is correct, I am just interpreting the inland revenue information)

There is more information about this in the link below

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_10026509

It might also be worth giving ACAS or CAB a ring

Anihilator

Bobl wrote: »

I thought we answered this very clearly earlier on.

1. Service Charge, or any Tips paid by cheque or Card legally belongs to the business, and 'can' be given to the staff, minus tax but it not legally binding to do so.
2. Cash can be taken by the staff.

If the 'Administrators' (not the admin staff of the business) have money which has been given by cheque or card, made out to the business, then they have a responsibility to pay the creditors first. They do not have to pay employees.

http://www.unitetheunion.com/fairtips

Interesting article which suggests this is the case although nowhere seems to confirm which law backs this up and it seems a very strange situation.

It also states the cash tips can be used by the employer to cover shortages, charge percentages etc for distribution and so on.

I also would suggest a term in the employees contract could mean that even if they are entitled to cash tips that the employer could make the contract say otherwise.

Sparhawke

But the original point still has not been answered.

Do the administrators have the right to say that tips are illegal and yet hold them back for the creditors?

No, they do not have this right, if they say they are illegal they should return them to the people who gave them. By simply holding them back from the people who they were intended for and yet making it appear that it is illegal for them to contest it they are on the wrong side of the law.

If I gave a service charge which at the bottom of the receipt was said it is going to the staff I would hit the roof if I later found out that someone working on behalf of a particular person or group had taken it for their use.

If I give £10 to a charity then I expect that amount to go into the charities coffers less certain fees that are always incurred, yet if all the money I donated was simply shunted off to pay some fatcat then I would have every right to go off on one.

If the bottom of the receipt stated that "this service charge does not go in any part to the staff yet pays off the creditors" then there would be no problem, but there is no two ways around it, they are taking those tips fraudulantly by stating they are illegal and still not returning them to the customers who paid them.

Sparhawke

Above it was stated that:

If the 'Administrators' (not the admin staff of the business) have money which has been given by cheque or card, made out to the business, then they have a responsibility to pay the creditors first. They do not have to pay employees.

But the actual bill for the food and whatever is the charge, the service charge does not have to be paid but is a voluntary gratuity in this age of a no cash society we are rapidly becoming that goes to the staff, not the business.