Complainant

Respondent

Anonymised Parties

A Waiter

A Hotel

Act

Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 13 of the Industrial Relations Act

CA-00057713-001

05/07/2023

The worker is a waiter and he commenced working in the employer’s hotel in the midlands in March 2023.  He had worked for an associated business in the south of Ireland since October 3rd 2022.  He earned €12.50 per hour and €13.50 per hour for working on Sundays.  He was employed on a “band A hours” contract, meaning that he was required to be available to work for three hours per week on one day a week.  Copies of his payslips show that he generally worked between 35 and 40 hours every week.

The worker left his job around July 7th 2023.  He has referred a dispute to the WRC concerning how tips were distributed in the employer’s hotel.  He claims that he did not receive tips paid by customers that were intended for staff and that he had to leave his job when he complained about this issue.

At the opening of the hearing, on behalf of the employer, Mr Ryan said that he would not respond to the worker’s claims.  I have therefore made the recommendation which is set out below, based on the information provided to me by the worker.

At the hearing of this dispute, the worker said that the restaurant in the hotel where he worked was very busy, serving up to 200 people most days.  He said that customers were generous with tips and that, if he had retained the tips given to him, he would have made more than he earned in his weekly wages.  He said that he was instructed to hand over all the tips he received in cash.  The worker said that he wrote to the HR manager of the company and he complained that he wasn’t getting his tips.  He said that he was called in by the general manager and threatened that he would only be rostered for one or two hours a week.  He said that the manager also threatened to dismiss him.

Following his complaint to the company’s head office, the worker said that he was given €49 in tips and a few weeks later, he received €100.  He said that this is a small fraction of the thousands of euros that he received in tips when he worked in the hotel. 

At the hearing, the worker said that he looked for information about how tips should be distributed to employees and, in April 2023, he got advice from the Department of Enterprise and Employment.  He said that, in accordance with the advice, he looked for a statement from his employer about the amount of tips received in the restaurant.  He said that his request was initially refused, and then he got a statement.  He said that the statement only included the value of two months’ tips.  The worker did not provide this statement at the hearing. 

The worker said that his life at work was made intolerable by what he described as “a very abusive manager.”  In a submission that he sent to the WRC before the hearing of this dispute, the worker said that he was suspended from work when a manager wrote a letter saying that she felt unsafe working in the same premises as him, that he had her phone number and that she feels unsafe in her home.  The worker said that this manager gave him her phone number and that he doesn’t know where she lives and that he doesn’t want to know.  He said that the manager speculated that his intention was to cause her harm, which, he said, is untrue and baseless.  He said that he reported this matter to a member of An Garda Síochána.

The worker said that his suspension from work is another form of abuse and that it was intended to get him to resign.  In the end, he said that he did resign.  He said that he had to leave because his employer stopped paying his wages.

This dispute concerns the failure of the employer to distribute tips paid by customers in the hotel restaurant to the worker.  When he made a complaint about this issue, the worker claims that he had to leave his job because of how he was treated by his employer.

The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 (“the 2022 Act”) was enacted on December 1st 2022 and inserts new sections 4A to 4F into the Payment of Wages Act 1991.  Section 4B provides that employees are legally entitled to receive a share of tips and gratuities paid in electronic form, by credit or debit card.  The Act does not regulate how cash tips are to be distributed. 

Section 4E(1) of the 2022 Act, concerning a tips and gratuities notice, makes no distinction between tips received in cash or in electronic form and provides as follows:

(1) An employer to which this section applies shall, in accordance with regulations made under subsection (2), display a notice (in this Act referred to as a ‘tips and gratuities notice’) stating -

(a) whether or not tips or gratuities are distributed to and amongst employees,

(b) where tips or gratuities are so distributed to and amongst employees, the manner in which they are distributed and the amounts so distributed,

(c) whether mandatory charges, or any portion of them, are distributed to and amongst employees, and if so, the manner in which they are distributed and the amounts so distributed, and

(d) such further or additional information as may be prescribed under subsection (2).

Sub-section 2 referred to above has been legislated for in Statutory Instrument 545 of 2022, the Payment of Wages Act 1991 (Display of Notices) Regulations 2022 (SI 545/2022).  Section 4 of the statutory instrument is clear regarding the positioning of a notice in a form that can be easily read in two locations on the premises and where consumers pay for a service.  Section 4(c) governs how the notice should inform customers about how the employer manages electronic and cash tips.  It provides that a tips and gratuities notice must contain,

…in addition to the matters referred to in section 4E(1) of the Principal Act -

(i) a statement to the effect that the Principal Act requires the employer to distribute to his or her employees any tips or gratuities received by the employer by an electronic mode of payment, and

(ii) a statement of the employer’s policy on tips or gratuities made to, or left for, employees in a form other than an electronic mode of payment.

The employer produced no information to indicate that a notice is displayed in the hotel restaurant that shows how frequently tips are distributed to staff, if they are paid in cash or through wages and the proportion of the tips given to each category of employees.

A complaint concerning a contravention of these sections 4A to 4F of the Payment of Wages Act 1991 may be submitted for adjudication under s.41 of the Workplace Relations Act 2015.  The worker was legally represented and he brought this matter for consideration as a dispute under s.13 of the Industrial Relations Act 1969.  His grievance is about the employer’s insistence that he hand over the tips he received in cash and about his decision to leave his job when he was suspended for complaining about this.

The worker said that he received more in tips than he earned in wages.  The employer did not contradict the worker’s version of events.  The worker’s payslips show that, before he was suspended, he earned an average of €500 per week.  At a minimum, if he served 10 tables a day and if he was paid €10 by each table, it is reasonable to assume that he earned around €500 per week in tips. 

The payslips submitted by the employer show that the worker was employed by them for 16 weeks in 2023, from week 12 until week 28.  If he had received the tips which he claims he was given by customers, he would have received €8,000.  Based on a generally accepted practice that tips are shared with kitchen staff, I estimate that the worker would have taken home around €5,000 in tips.

I accept that the worker had to leave his job, and I note the failure of the employer to respond to this claim.  The worker said that he was suspended for making a complaint and his wages were stopped.  I find that it was reasonable for him to look for another job.  While he could have raised a grievance before he resigned, it seems to me that, based on how he was treated for making a complaint about the distribution of tips, his efforts to raise a grievance would have met with little success.

To avoid similar disputes in the future, I recommend that the employer gives serious consideration to the obligations regarding tips and gratuities set out in The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022.  In compensation for the employer’s failure to pay the worker the tips he earned, and for his unfair dismissal, I recommend that the employer pay him compensation of €7,000.  

Tips and gratuities, constructive dismissal