A hotel chef who complained over how his employer divided customer tips among staff has raised “important questions” over how new legislation governing the payment of tips and gratuities is being applied, according to the Workplace Relations Commission (WRC).
The WRC said the junior sous chef had identified shortcomings over how the hotel, which was not identified, had applied provisions of the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022.
The chef, who began working at the hotel in October 2021, raised a grievance against his employer over his alleged unsuccessful attempts to regularise the distribution of tips in the hotel since the new legislation came into effect on December 1st, 2022.
He complained that the hotel had no policy on how tips were distributed among staff, and there was no information notice for customers to explain how tips were divided.
Under the hotel’s current procedures, the chef claimed a group of four chefs working the lunch shift and five chefs working the dinner shift received the equivalent in tips paid to one staff member working in the hotel’s bar and restaurant.
The complainant argued that such a distribution of tips was unfair as chefs contributed to the provision of a service to customers who would not visit the hotel if the food was not of a high standard.
The chef claimed he should be treated as an individual, rather than part of a group, for receiving a share of customer tips.
'Collective issue'
Ibec official Aleksandra Tiilikainen, representing the hotel, said the distribution of tips in the business was a collective issue.
Ms Tiilikainen said any recommendation from the WRC would impact 35 staff and not just one employee.
She claimed the complaint raised by the chef was not appropriate to be dealt with under the Industrial Relations Act.
The WRC heard that the hotel had placed a notice at the entrance to its restaurant in advance of the new legislation, which stated that “100 per cent of tips go directly to staff”.
Ms Tiilikainen said the hotel operated a “tronc” system, whereby tips are collected and managed by its staff and are distributed at the end of each shift, with a share going to kitchen staff.
The WRC heard that following a meeting on January 12th, 2023, the general manager told the chef that hotel management could not direct what share of tips should be given to chefs and kitchen staff.
The chef was given the same information when he raised the issue again at another meeting in April 2023.
Ms Tiilikainen claimed the hotel was not required to change its policy on tips as staff were given all tips received in the hotel.
For that reason, she also claimed a formal meeting with employees was not considered necessary.
Ms Tiilikainen said the hotel’s information notice for customers on tips, while “very brief”, complied with the requirements of legislation.
She accepted the hotel’s management and distribution of electronic tips was not as transparent as required by law, but said it was in the process of updating its notice and policy to bring them into line.
Non-customer-facing
Ms Tiilikainen said the chef was in a non-customer-facing role and that the hotel’s staff had decided that he should be counted with other kitchen staff as one employee for the payment of tips.
She claimed the hotel’s position is that he had not suffered any loss as a result of this policy.
In her ruling, WRC adjudication officer, Catherine Byrne, agreed it was incumbent on an employee with a grievance to use their employer’s procedures to find a resolution.
However, she said the chef had raised important questions about the workings of the new legislation on tips.
Ms Byrne said the legislation recognised that tips paid by credit and debit cards were received by the employer, who had responsibility to distribute them fairly.
She claimed the hotel’s system of cashing up electronic tips did not meet the requirements of the legislation, which included providing staff with written information on how much tips were received over a particular timeframe and the proportion of tips that an individual employee was paid.
The WRC also disagreed with the hotel’s view that it had no obligation to consult staff about its policy on tips as one was already in place before the new legislation came into effect.
Ms Byrne said it required employers to establish a policy on the distribution of electronic tips following consultation with staff. She said the legislation required more than a policy that “tips are divided by staff at the end of each shift”.
Ms Byrne encouraged the hotel to develop a policy that included the job title of the person responsible for managing electronic tips and the amount received by staff, as well as the staff members eligible for electronic tips and the proportion to be given to each category of employee.
She said the legislation meant that customers must be informed how frequently tips are distributed to staff, if they are paid in cash or through wages, and the proportion given to each category of employee.
The WRC recommended that the chef should use the hotel’s grievance procedure to seek a resolution “at local level” if the issue remained unresolved after three months.
It also stated that he should submit a complaint under the Payment of Wages Act 1991 if his complaint remained unresolved at that stage.
