The ALMR and Unite have announced that they have agreed a voluntary code on tipping to promote good practice across the industry.  Since the Government consultation into tipping closed over 15 months ago, there has been no response issued and the public confusion and bad press for restaurants who deduct money from service charges continues.

The ALMR and Unison believe that the only way to ensure that staff are treated fairly and customers can trust the system is to have greater transparency.  They have therefore worked to put together a set of “good tronc” principles.

A Tronc is an arrangement used to pool and distribute tips, run independently of the employer by a Troncmaster and the system is used extensively throughout the catering industry. PAYE is due on any gratuities distributed and the Troncmaster is responsible for calculating and deducting this.  However, NICs are only due on payments from the Tronc if the employer directly or indirectly allocates the payments.  This represents a saving for the employer and means that staff receive more money.

The “good tronc” principles proposed in the new Code include the fact that a tronc system must be free and independent from undue influence, transparent and open and it must provide for a genuine and fair allocation of monies in consultation with staff.  The full Code will be published soon and we will keep you informed of developments.

By introducing a transparent system where details of how service charges are distributed are set out on the menu it is hoped that customers will understand the allocation and therefore trust that restaurants are treating staff fairly.  The system will provide for a complaints procedure for both customers and staff if the Code is violated.

This code should be welcomed, as it seems a well implemented voluntary system would remove the need for Government to legislate and thereby potentially impose requirements that may not be in operators’ interests.

The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.