Unite has called for the Government’s revised tipping code of practice to be withdrawn, arguing that the proposed rules would leave too much control over tip allocation with employers.
The Draft Revised Code of Practice on Fair and Transparent Distribution of Tips was laid before Parliament on 29 June and is expected to come into force in October, subject to parliamentary approval. It updates the statutory framework introduced after the Employment (Allocation of Tips) Act 2023 and reflects additional obligations under the Employment Rights Act 2025.
The changes are due to require employers to consult workers or their representatives before creating a tipping policy and to update that policy every three years. Acas says tipping law will change in October 2026, alongside wider Employment Rights Act changes covering harassment, employment tribunal time limits, trade union rules, and other workplace protections.
Unite argues that consultation is not enough. The union said the draft code should be withdrawn to allow proper consultation and claimed ministers had failed to give workers full control over the allocation of tips.
The union said: “The Government is requiring employers to merely consult on how tips will be allocated. The code confirms, following such a ‘consultation’, employers will have carte blanche to decide which workers will receive tips.”
Unite general secretary Sharon Graham said: “Workers should have control over their own tips pure and simple. Most customers assume they do anyway. Giving managers control, even letting them keep a slice for themselves, is clearly unfair.
“The Government messed this up the first time in their code of practice on tipping. The fact that they are now repeating the same mistakes in a revised version that was supposed to address workers concerns is genuinely concerning.”
Bryan Simpson, Unite lead organiser for hospitality, said: “This new flawed code of practice must be withdrawn. The Government is showing contempt for hospitality workers who are among the most vulnerable in the economy, by not even consulting on its plans.
“Labour promised to give workers greater control over their tips. That promise must now be honoured.”
The dispute lands in a sector where tips, service charges, tronc arrangements, management discretion, and payroll systems have long created tension between employers and workers. Hospitality businesses often rely on complex staffing models, with front of house, kitchen, bar, management, agency, and casual workers all contributing to service delivery in different ways.
The original legislation required employers to pass on qualifying tips, gratuities, and service charges to workers in a fair and transparent way. The revised code is intended to support additional consultation and review requirements. The practical question is how far workers should be able to determine the allocation model, and how much discretion employers should retain when balancing different roles inside the business.
The issue is becoming a compliance and employee relations test. A written tipping policy will need to explain how tips are distributed, which workers are included, how consultation has taken place, when the policy will be reviewed, and how disputes will be handled. Records will need to support the policy in practice, especially where workers challenge allocations.
The challenge is particularly acute for hospitality groups with multiple sites. A tipping model that works in a full-service restaurant may not work in a hotel bar, casino, café, pub, delivery linked operation, or events venue. Employers may need site-level detail while still maintaining group-level governance and payroll consistency.
The commercial context is difficult. Hospitality companies have faced higher wage costs, energy bills, rent, business rates, food inflation, staffing shortages, and changing consumer demand. Tips are not a substitute for wages, but they are a material part of take-home income for many workers. Any perception that managers or employers control distribution unfairly can quickly become a retention, reputation, and industrial relations problem.
Customer expectations add another layer. Many consumers assume service charges and card tips go directly to the workers who served them. Where distribution is broader, covering kitchen teams or other support staff, employers need to explain the rationale clearly. Where managers are included, the legal and reputational risk is higher because workers may see the system as diluting their income.
The move also sits within a wider employment rights programme. Employers are preparing for changes on harassment, tribunal time limits, trade union rules, flexible working, zero-hours protections, and unfair dismissal. The tipping rules are narrower than those reforms, but they bring the same underlying direction: more formal process, clearer worker consultation, and stronger evidence trails.
Payroll and HR systems will be central. Card tips, service charges, cash tips, tronc schemes, tax treatment, National Insurance, and rota data can create operational complexity. Employers that cannot show how decisions were made and applied consistently may face disputes even where the policy appears compliant on paper.
The code’s progress through Parliament will determine the final position, but Unite’s challenge increases pressure on ministers to clarify whether consultation gives workers genuine influence or simply requires employers to hear views before making the final decision.
The tipping debate is about trust in workplace systems where customer money passes through employer-controlled processes before reaching staff. Companies with transparent policies, clear records, credible worker engagement, and a defensible rationale for how service income is shared will be better placed for the next phase of regulation.
You must be logged in to post a comment.