General Scheme of the Payment of Wages (Amendment) Bill 2019: Discussion

I welcome Mr. Michael Lennon, president, Irish Hotels Federation, IHF, and Mr. Tim Fenn, chief executive; and Mr. Adrian Cummins, chief executive, Restaurants Association of Ireland, RAI, and Ms Amy Sweetman, membership services and public affairs manager. I invite the IHF to present first. I will then allow members to direct questions to them.

I draw the attention of our guests to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity, by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

I ask everyone to ensure they have turned their mobile phones off or onto flight mode as they interfere with the meeting as well as its transmission and recording. I call Mr. Fenn to make his presentation.

Mr. Tim Fenn

I thank the Chairman and committee members. The IHF welcomes this opportunity to make a submission to the committee following the referral of the general scheme of the Payment of Wages (Amendment) Bill 2019 for pre-legislative scrutiny. As the national organisation of the hotel and guesthouse sector in Ireland, the federation represents approximately 1,000 properties, which employ in the region of 60,000 people. Let us be very clear at the outset. The IHF view is that we fully support the payment of all tips and gratuities to staff; that each establishment should display clearly to staff and customers how tips, gratuities and service charges are treated; and that service charges levied by a business, as distinct from tips and gratuities, are part of business revenues and, as such, can be applied to meet all business costs, including salaries.

It is worth reflecting on the views expressed by the Low Pay Commission on this issue. The Minister requested that the commission examine this area as part of its 2018 work programme and report its findings and any recommendations it might consider appropriate. The commission, adhering to its evidence-based approach, instigated a consultation process with relevant stakeholders and also engaged with the Workplace Relations Commission, WRC, and the Revenue Commissioners. Current practices in other jurisdictions were also examined. In its report - LPC No. 10 of 2018 - the Low Pay Commission reached a number of conclusions regarding tips and gratuities in Ireland, including the following. First, the commission does not believe that sufficient reliable data exists to prove that the issue of employers withholding employee tips is a significant problem in Ireland. Second, the commission does not believe that legislation or regulation should be introduced in this area as the administrative and compliance costs involved would not be justified. The IHF notes that agreement on the commission conclusions was unanimous, with all employer, trade union and independent members of the commission endorsing the conclusions as set out.

This is a complex area and if we reflect on the range of responses to the National Minimum Wage (Protection of Employee Tips) Bill 2017, we have an opportunity to ensure that key points of principle are clearly addressed in any proposed new legislation sponsored by Government. Much of the language contained in the Bill was far too vague to meet the requirements of legal certainty, a core principle of legal drafting. In the IHF's view, it would have given rise to confusion and uncertainty for employers and would have led to significant and unnecessary administrative and cost burdens for employers.

It is the IHF's view that cash tips, tips paid through a credit or payment card system and service charges are distinct from each other and, therefore, must be treated separately. Cash tips are left at the discretion of the customer and the employer is currently not required to be involved in the distribution. Tips paid through credit or payment cards are part of the books and records of a business and the employer has a clear responsibility to administer the distribution of and taxation on such tips. An internal policy, collective agreement or code of practice is usually agreed at employment level on how best to share and distribute these tips. A service charge is not a tip or gratuity. A service charge is levied by the business on a customer, who does not have the right to determine the amount of the charge. The customer, therefore, does not have the right or expectation to determine how the employer manages and treats this income stream. A charge for service should not be the subject of this legislation as to do so would interfere in a contract between a business and a customer.

Tips or gratuities are entirely discretionary. They are voluntarily left, gifted or added to the payment by a customer or a guest as a gesture of appreciation for the service they receive. They are given in various forms. Customers or guests might leave cash upon departure from a hotel; customers or guests might add a tip or gratuity to their payment when paying by other means, for example, by credit or payment card; customers or guests might indicate a department or specific member of staff to whom they wish the tip or gratuity to be left; and customers or guests might not indicate to whom or to which department they wish the tip or gratuity to be left. If an employer volunteers to manage the distribution procedure, it would be appropriate for a clear policy to be available to relevant staff as part of their employment contract.

It is common in hotels that tips are pooled among the team, and occasionally management, depending on the situation. For example, a guest may instruct that a tip is given to a particular employee as an acknowledgement of a job well done and that employee may be a member of the management team. The tronc system of distributing tips was previously in widespread use in the hospitality sector but has now been largely eliminated. Tronc schemes are fraught with difficulties and should, under no circumstances, be mandatory on the employer.

Criminal sanctions for alleged non-compliance are totally unnecessary. The Oireachtas has a role in ensuring employment legislation does not impose an unfair burden on employers and, in particular, does not start to introduce criminal sanctions as a default position. We understand that the area of health and safety should be regarded differently. However, it is entirely excessive and disproportionate to make non-compliance with employment legislation a criminal offence and, in particular, in an area where, for the most part, employers are reluctant to become involved. If an employee has an issue with an inappropriate or unlawful withholding of tips or gratuities by an employer who is involved in the distribution of tips or gratuities, they could simply bring a claim under the Payment of Wages Act 1991, as may be amended, to the WRC.

We fully support the payment of all tips and gratuities to staff. However, we are strongly opposed to any legislation that: imposes any obligation on employers to be required to manage the distribution of tips and gratuities; seeks to impose a criminal sanction on an employer given the voluntary nature of tips and gratuities and the potential for injustice based on speculation as to what might have been the customer’s intentions; and does not properly differentiate between a mandatory charge for service on the one hand and voluntary tips and gratuities on the other.

I thank members for the opportunity to make this submission. We welcome an opportunity to make further submissions on this matter in the future based on the detail of any Bill that emerges. We are happy to answer any questions members may have.

Mr. Adrian Cummins

I thank the Chairman and committee members for inviting us to this session of the joint committee to discuss this proposed legislation on tips and gratuities and to carry out pre-legislative scrutiny on same. I am joined by my colleague, Ms Amy Sweetman, membership services and public affairs manager for the RAI. The association was founded in 1970 with the goal of representing restaurants in Ireland on issues impacting the restaurant, hospitality and tourism industry. Over the years, the association has sought to represent the views and interests of its now 2,500 plus members at a local and national level, as well as at an EU level through our membership of the EU umbrella body, the Confederation of National Associations of Hotels, Restaurants, Cafés and Similar Establishments in the European Union and European Economic Area, HOTREC.

We welcome the opportunity to comment on the Bill. We welcome the principle that tips and gratuities should not be used to make up contractual wages. This is something that we have always advocated to our members and we welcome that it will, going forward, be stated in legislation. One hospitality worker who does not get their tips is simply one too many. We must highlight that the association has daily communication with our members through various means and continuously advocates and informs members of best employer practices and of employment legislation obligations. This legislation will stamp out the bad behaviour of the few and renew public confidence in the many.

We welcome the distinction between tips, gratuities and service charges in this proposed legislation. Regarding head 6, obligation on certain employers to prominently display notice on tips, amendment No. 1, we welcome that customer, patron and employee will be made aware clearly, through display of public notice, the manner in which tips, gratuities and service charges are distributed on the premises. However, subsection 2 references "display (a) on menus or (b) at principal points of payment". We suggest, given that menus are increasingly becoming more of a legal statement rather than a list of food options available, that the requirement be similar to the requirements in food safety legislation, that is, such information being displayed in a prominent location within the establishment that is easily accessed by members of the public, perhaps with a brief indication of the location of the information on the menu. By way of example, a statement on a menu could be along the lines of: "For more information on how tips, gratuities and service charges are handled in this business, please see public notice."

Section 4A(3) states: "The Minister may make regulations to provide for the manner, means and form by which employers shall display the information referred to under subsection (2)." We ask that the Minister have regard for the fact that this notice will be required in a number of varying businesses, and as such, it is our hope that such a regulation may not be too prescriptive. Some businesses within the requirement may not have menus, but a menu board on display, for example. Head 6 refers to the obligation on employers to prominently display notice on tips and states under section 4A(1) that it "applies to employers whose company is registered with the appropriate authorities as a licensed premises or business serving food or drink". The section detailing the purpose of the above section outlines that display of a tipping policy:

would be confined to businesses in the hospitality sector where food and drink is served to paying customers. While there are other sectors where tips and gratuities are quite common, it is primarily in relation to service staff (waiters, waitresses and kitchen staff) that this issue has been raised as a problem that requires legislative intervention.

It is disappointing that the restaurant and hospitality sector has been singled out on this occasion. As outlined in the Low Pay Commission report, there is practice of tips and gratuities in many other sectors, including, but not restricted to, couriers, taxis, hairdressing, beauty therapists and croupiers. The question we would pose is: should employees and customers not also be made aware of what happens to tips in those sectors?

A number of statements have been made in the Dáil and the Seanad about the non-compliance with employment law within our sector. The WRC report of 2018 has been referenced on a number of occasions in debates on tips and gratuities and the statistic of a 67% rate of non-compliance has been referenced for our sector. We wish for committee members to take note that based on how the WRC categorises sectors, food and drink is the applicable category for our members, indicating that pubs and takeaways, including convenience store delis, service station delis and fast food outlets are all included in this category. We take issue with such statements, as while our members would fall under food and drink, the sector the RAI represents only includes full-service restaurants, hotel restaurants, gastro pubs, cafés, golf club restaurants and cookery schools. I encourage members to review the 2018 annual report of the WRC, specifically pages 41 through to 46 listing convictions. The majority, if not all of those relating to the food and drink sector, do not fall under our membership. Under a freedom of information request sent to the WRC on the issue of employees not receiving tips over the last five years, no employee has raised the issue to the commission as a complaint. I look forward to answering members' questions.

I thank Mr. Cummins. Before I go to our colleagues, I am conscious we have another set of witnesses so I ask members to direct their questions specifically.

I ask the delegates to try to address their answers to the questions asked, rather than making statements or speeches.

The delegates are welcome. My party and I are very critical of the general scheme of the Bill because it does not aim to address the serious and widespread issues workers are experiencing. I take issue with some of the contributions made by certain organisations, some of which are not represented at this meeting, on the extent of the problem. There is a significant amount of evidence that workers have serious concerns and are experiencing the theft of what rightfully belongs to them. The general scheme of the Bill really does nothing because it does not address the core issues surrounding the service charge, about which I have specific questions for Mr. Fenn and Mr. Cummins. We know that under the National Minimum Wage Act, it is illegal to use tips to top up workers' pay. That is a non-issue in terms of the general scheme of the Bill which, essentially, aims to ensure premises put up signs in the window on a voluntary basis. That is certainly not acceptable. I wish to hone in on comments Mr. Fenn made on the service charge. Does he believe it just and fair that a service charge permitted under the National Minimum Wage Act be used to pay workers their base rate of pay?

Mr. Tim Fenn

When one goes into a solicitor's firm and retains a solicitor, one receives a bill and pays it. One does not get to tell the solicitor what to do with the money. When someone goes into a restaurant or hotel and receives a bill with a charge on it, he or she has a choice: he or she can use the service or he or she can leave. Once someone enters a contract with the business, it may decide what it wishes to do with the money under that contract. It may choose to charge for a service or product and can mix the charge as it wishes. When someone pays the bill, it is up to the business to decide what it wishes to do with the money. However, it is a completely different situation if someone decides to leave a tip on the table or add it to his or her card payment. Such money belongs to employees who in every situation should receive it.

Mr. Fenn perceives a distinct difference between a tip and a service charge.

Mr. Tim Fenn

At the outset of our submission we suggested each establishment clearly display to staff and customers how tips, gratuities and service charges are treated in order to avoid confusion. If a business, of its own volition, decides to pay 100% of the service charge to staff, that is its business and it would be useful for the customer to be made aware of it. If the business has other plans for the money-----

I do not have much time. When a customer goes into a restaurant or similar and sees that there is a service charge, he or she, rightly, assumes that it will go directly to the staff who look after the customer, including back-room staff such as chefs. Why is the service charge not included in the overall cost? Why is it not built in such that the consumer can see it? Essentially, it is a hidden charge or a top-up. Why is it not included in the menu price in the first place?

Mr. Tim Fenn

We are discussing the principle. It is my belief service charges in hotels are largely a thing of the past. Some may still impose one. Hotels may charge for various services such as ordering a taxi or making a telephone call. The hotel charges the customer who pays for the service. Under a separate contract, the business will have an employment arrangement with its employees and pay them based on their employment contract. Insofar as things happen outside the employment contract and outside the contract with the customer such as the payment of tips and gratuities, we are 100% in agreement that all of that money should go to the employees. When it comes to the contract with the customer and the contract with the employee, the business owner is in charge of the destiny of the money he has contracted with his customer.

I will come back to Deputy Brady. There are a lot of speakers offering.

I thank the delegates for attending. I noticed that Mr. Cummins made a specific point about different sectors and stated his organisation only represented one sector of the food and drinks industry. The Low Pay Commission stated it did not carry out a broad examination of how bad the position was in the restaurant industry. As a result, its report does not stand on its own merits. It does not really reflect what is happening because I know that certain unions consulted staff in restaurants and other businesses in Dublin city in the past week or so and found that many workers were not happy with their conditions or were very insecure in their terms of work. Such insecurity arises from issues such as the fact that workers have no security in their first year of employment and can be sacked at any time, as well as the fact that some workers feel very intimidated. It does not surprise me that few cases have been taken to the Workplace Relations Commission in these circumstances.

The situation at The Ivy restaurant which is nearby was all over the newspapers. As such, it is not a surprise to anybody. When I raised with the Minister for Employment Affairs and Social Protection the issue of tips being used to part-pay the difference between the national minimum wage and workers' contracted wages, she was quite clear that such a practice was illegal. Within one month the restaurant mentioned extended its service charge of 12.5% for tables of five or more to all tables. It effectively cut out the opportunity for workers to receive tips. No one will leave a tip on top of a service charge because, as Deputy Brady pointed out, people assume the service charge goes to the worker at some stage. With particular reference to the restaurant industry, do the delegates think a restaurant should be allowed to use a service charge for its own purposes when customers have the impression that the money will go to the worker responsible for their service? It is a service charge.

Mr. Adrian Cummins

I thank the Deputy for her questions. My colleague, Mr. Fenn, clearly outlined the issues surrounding the service charge. He and I are at one on the issue. Each business may decide on its pricing model. It is not for me to determine or tell a business what to do with the service charge. I am precluded from discussing the issue of price. The Competition Authority would have an issue if I were to do so. We welcome the provisions of the Bill which deal specifically with tips and gratuities. The public should know that all workers receive their tips and gratuities. On the service charge, as my colleague stated, there is a contractual agreement between the customer and the business.

When they enter into a contractual agreement, that is it. Clearly, an agreement as part of a contract is separate from the issue.

Will the Deputy remind me of her question about the Low Pay Commission?

The report of the Low Pay Commission does not stand on its own merits as the commission did not carry out a widespread examination of the sector.

Mr. Adrian Cummins

The Low Pay Commission was given responsibility to compile a report. It issued its report, in which it was very clear. I have no further comment to make on how it did its work.

I am concerned by what has been proposed in the Bill and endorsed in terms of the removal of the service charge. I am also concerned from the perspective of customers. The Bill seems to suggest money that is floating around might still reach the staff. There is very little money floating around. Most people when they go into a restaurant make a decision on whether they should give a gratuity or a tip which they understand to be covered by a service charge. I randomly asked six people who were not friends what they thought was meant by a service charge and every one of them said it was a tip. Two of the six clarified that when a service charge was charged, they did not give a tip because they believed the service charge was a tip. That was their understanding. It is a view that is commonly understood by people in a restaurant. Using that logic, there is a reason a service charge is applied in serving large groups. I have spoken to restaurant and café owners who have told me that serving large groups requires a lot of more work and extra effort from staff. They have said it is good that such work is recognised via the service charge and that they include it because they feel bad when a tip is not given. Everybody understands the service charge is a tip. If I were a customer, I would be concerned to hear that I entered into a deep contractual relationship every time I ordered a plate of pasta in a restaurant and hard luck on me. How does one justify the fact that groups of five or six people are charged a service charge? Is it the case that those attending birthday parties, large family groups or those who booked their Christmas dinner need to pay more for the service they receive in a restaurant? Should the organisations state "This is the charge for a large group"? Is the restaurant that believes large groups should pay more for food and use of chairs? What is the justification for charging a service charge if it is not a tip?

Mr. Adrian Cummins

The Bill seeks to remove any confusion. It will be very clear to the customer when he or she arrives at a venue what the tipping, gratuity and service charge policy is. That is why we welcome the Bill. To reiterate my previous comment, the service charge is part of a contractual agreement between the business and the consumer. It must be very clear to the consumer in advance that it is part of a contractual agreement. Perhaps the public needs to be made more aware of that aspect.

Why is a service charge applied to larger groups, rather than to every customer?

Mr. Adrian Cummins

Each business determines how it runs its business. We cannot tell a business how to price things or run its business because it does that itself.

Does Mr. Cummins think it is acceptable for businesses to charge large groups more? Does he think it is acceptable for servers not to receive tips?

Mr. Adrian Cummins

The Competition Authority would have a difficulty if I were to answer a question about market manipulation. I cannot answer the Senator's question because it precludes me, as a member of a trade association, from answering it.

Does Mr. Cummins agree that serving a large group is harder for service personnel? Does he agree that serving large groups entails much more work and effort for waiting staff?

Mr. Adrian Cummins

I worked in the hospitality industry for many years. When one talks to workers across the country, one will discover that one must bring in more staff to cater for large groups. There can be more work involved in serving larger groups than tables with just two or four people. Catering for larger groups can require a lot more staff and more work for all employees in the business.

I wish to make a separate point.

No, I cannot allow the Senator to do so because I want to be fair to everybody present, but I will come back to her.

I welcome the representatives of both organisations and thank them for their submissions. I note that Mr. Fenn made reference to the tronc system and outlined that it was fraught with difficulties. Recently the tronc system was introduced in Canada where it has proved to be very negative for workers. Mr. Fenn mentioned his experience of it here and also said the system was fraught with difficulties. Will he, please, explain?

Mr. Tim Fenn

The matter was dealt with in the report by the Low Pay Commission which engaged with the Revenue Commissioners and various organisations. The system was commonplace, although it gave rise to issues among staff in administration and compliance with the law. We are saying it is not appropriate for our members and employers in the industry to be forced to be involved with something that is fraught with difficulties, particularly the requirement for an employer to be registered, for the tronc master to be a registered employer and for him or her to be liable for making returns to the Revenue Commissioners. Making having such an onerous structure obligatory under law would be completely dysfunctional.

I thank the delegates for coming. It was nice to bump into Mr. Cummins before we came in.

There is mention in the submissions of the lack of cases about tips. It is very simple. I speak as an industrial relations practitioner. Tips are not covered by employment law, which is why there have been no cases taken to the WRC. It is also why Sinn Féin has developed a Bill to make it legal for employees to receive their tips. I want to cut to the chase, as I am also conscious of the time. Those watching the debate will be shocked by what they have heard this morning. Most customers understand the service charge should go to the employees, but people will have heard something very different this morning. At the risk of being rude, I must put the following to our guests. At this point is charging a service charge not a complete con job?

Mr. Tim Fenn

I reiterate that what we are talking about is what would be appropriate legislation and having a clear understanding of same. As Mr. Cummins has made very clear, we do not get involved in pricing within a business. In principle, a business can decide to charge €40 or €50 for a meal, but pricing is dictated by whatever is right for the business. A business may decide to charge a service charge in certain instances, be it where service is complex or simple, but it is its decision. All we are saying is that if a business decides to charge a service charge in its contract with its customer, it gets to decide what to do with it. We suggest a business make clear to its customers what its tips, gratuities or service charge policy is. Customers will then have a choice to make. They can decide whether they want to go into a restaurant that does not give 100%, 95% or whatever the percentage is of the service charge charged to its staff. It is the restaurant that makes the choice as to whether it will apply a service charge. I reiterate the basic principle that tips and gratuities belong to the staff. There should be no situation where staff do not receive 100% of the money.

What about the service charges?

Mr. Tim Fenn

Service charges are different. The service charge is a contract between the customer and the business. If the business decides to pay 100% or another percentage of it to staff, that is fine. That is its decision. However, that should be clear to the customer in order that there is no confusion.

We have heard clearly from our guests that the decision as to where the service charge goes is at the discretion of the employer, as far as they are concerned. Customers will find that shocking. This must be viewed in the context of an industry that is rife with exploitation. I invite the guests to listen to the next group of speakers because they have new independent data on what is happening across the hospitality sector and it is shocking.

I apologise for being late. I am very aware that this conversation is going in one direction, namely, that the industry wants to define what is a service charge. The witnesses have made up their minds that the definition of a service charges is a contract between the business and the customer. The worker, the person who delivers the service which has to be delivered by somebody, has been completely excluded. The customer cannot write something down and say he or she will pay for it because something has to be delivered. Service means a human being intervening to help or deliver the service, which is always understood. It is beyond me that the industry is seeking to redefine what service charge means. It has always been understood that it is for the person delivering the service. The industry has redefined what a service charge is. The Bill proposes to legislate in the area of gratuities and tips given to workers while excluding service charges. It goes beyond the industry's remit that it gets to define service charges. In which legislation or regulation is a service charge defined as a contract between a business and a customer, as the witness claimed, with the person who delivers the service being completely left out?

Mr. Adrian Cummins

I thank the Deputy for her question. This Bill goes a long way towards defining the difference between tips and gratuities and what a service charge is. Service charges also apply in other sectors. This is a point of law and a contractual agreement. Service charges apply to the sale of tickets for entertainment events and also to the sale of tickets for flights and other items that are sold to consumers. They do not only apply in our sector but in other sectors also.

Can Mr Cummins tell me to which point of law he is referring?

Mr. Adrian Cummins

I am not an expert in law.

Mr. Cummins is delivering a discourse on behalf of his sector. He said this was a point of law. What point of law is it?

I ask the Deputy to give Mr. Cummins an opportunity to reply.

Mr. Adrian Cummins

This arises under contractual law between a consumer and somebody who is delivering a service. That is our point of view.

It is a point of view and not a point of law.

Mr. Adrian Cummins

We believe it comes under contractual law. I do not have the exact law to hand but I can send the committee our opinion on it.

That would be helpful.

If it is not a point of law already-----

Mr. Adrian Cummins

We believe it is.

Mr. Cummins believes it is but he cannot tell me where that is stated.

The point is to be clarified.

It is Mr. Cummins's point of view that it is a point of law. Will this Bill, in his view, make it a point of law that the service charge can be excluded from those that deliver the service?

Mr. Adrian Cummins

I ask the Deputy to repeat her question.

In Mr. Cummins's view, there is a point of law around the definition of service charge. Is it also his view that the Bill the Minister is proposing would allow him to decide that service charges will not be returned to those who deliver the service?

Ms Amy Sweetman

If I may, I believe the legislation, as it defines service charges, does not dictate where the service charge should end up. As we stated previously, that would be at the discretion of the employer. We need to be very cautious in that we cannot dictate to any of our members under current competition law where any moneys entering the business are subsequently disbursed. However, we fall on the side of the argument that tips and gratuities are always to be disbursed in full to the employee. On service charges, it is our understanding that under current contract law and under the definition in this Bill, it is for the employer to determine where they go and we will have no influence over that decision.

I could accept that if we were dealing with competition law. We are dealing with industrial relations law, which is supposed to protect the rights of workers. There is a problem with Ms Sweetman's approach that it can be this or that, or one can make up one's own mind as to what it is. I am afraid that does not cut it when it comes to workers' rights, particularly given what they are paid for the work they do.

Ms Amy Sweetman

Under competition law, the determination of where moneys entering a business end up is solely the responsibility of the business. A trade association such as the Restaurants Association of Ireland or the Irish Hotels Federation cannot intervene in respect of how those moneys should be disbursed. We agree with that opinion, as stated by the Competition and Consumer Protection Commission.

Mr. Tim Fenn

We are getting a little sidetracked here. I agree with the Deputy that the core issue today is looking after the people who provide the service in our industry. That is all we focus on.

I am not sure I understand what Mr. Fenn is talking about.

Mr. Tim Fenn

If I may respond, insofar as there is a contractual arrangement between an employee and an employer, that should be the core issue for discussion today. The employee is retained to provide a service on the basis of the products, etc., that the employer provides. The employer pays the employee to provide the service. Separate from that, the employer charges the customer and uses that money to do whatever he or she does, and also to pay the employee. The confusion here is that there is some additional money available for tips and gratuities. The tips and gratuities, as mentioned, are not handled in employment law. We welcome a Bill that clarifies the process in which all 100% of that money should definitely go to the staff.

Can I come in there, please?

A number of members wish to ask supplementary questions. I ask Deputy Brady to keep his question short. I will try to bring Deputy Smith in later.

On live radio, Mr. Cummins said that a significant proportion of restaurant revenue is derived from tips entering the cashflow of the business. These tips are essentially being stolen from the workers and merged into the cashflow of the business. It is interesting to hear Ms Sweetman say that 100% of tips and gratuities should go to the employees. Mr. Cummins on live line radio acknowledged that illegal actions are taking place. Can I just ask him-----

No, the Deputy made a very specific point and he should give Mr. Cummins an opportunity to respond.

I am getting to that point now. When Mr. Cummins says a significant proportion of tips is entering the cashflow of businesses, what does he mean by a "significant proportion"?

Mr. Adrian Cummins

I take issue with Deputy Brady's use of the word "stolen". I do not agree with it.

The staff take issue with it.

Deputy, please.

Mr. Adrian Cummins

I also believe the Deputy is taking words I used in the media out of context and he may have changed them slightly. I was referring to 2009 and 2010 when Revenue asked our association to a meeting with it to discuss tips. We had a meeting and Revenue was very happy with the way in which tips were being distributed and how the taxation was dealt with from a Revenue point of view. My comments in the media were made in regard to that.

We know the legislation does not deal with the core issue of the service charge and will not stop the illegal taking of tips. In many cases, tips are withheld for breakages or poor customer numbers in the hotel or restaurant in question.

This Bill does not stop that from happening. It stops tips from being used to top up wages. It is established that some businesses illegally withhold tips. Do the witnesses firmly believe that putting up a sign at the front of a restaurant will change anything? Do they think sanctions should be imposed on businesses, restaurants or hotels that act illegally? If so, what sort of sanctions should be imposed?

Mr. Tim Fenn

As a basic principle, we believe that all tips and gratuities should go to staff. The difficulty is that this is a complex area. Sometimes people add their gratuity or tip in the form of an electronic payment. This means it enters the books and records of the business. Once it is on the books the employer clearly has a responsibility to look after it, to pay it to staff based on whatever agreement they have about how it is distributed and to account to the Revenue for tax. It gets complex if the money is left on the table. The employer has no hand, act or part in the distribution of that cash. It is handled solely by the staff. That means the employer has no responsibility and the staff handle it themselves. That is the best way for it to be handled, full stop. We get into a very vague area if the employer is placed under a legal obligation to have some control over it. First, that brings money that may or may not be accountable into a system where the employer is legally responsible for it. Second, when that money comes in it has to go on to the books and records. Once there, it has the same status as money that comes in from a credit or debit card. At the moment, when the employer gets the money he or she is responsible for it and has to deliver it to the staff. We have no issue whatever with clarifying that. Ideally, it should be in a contract of employment so that employees know what their rights are, what they are entitled to get and how this money is calculated and distributed. There is no issue with that.

However, criminal sanctions forcing an employer to go around sweeping cash off tables and making the employer criminally responsible for not doing this correctly would create a very difficult administrative responsibility. I am not sure that would serve the interests of the employees. The employees themselves are best positioned to manage that cash. They should manage it themselves. If the employer chooses to take that money and manage it, he or she takes responsibility. However, the employer should not be required to do so. It is not the best outcome for the employees. The best outcome for the employees is for them to manage the cash left on the tables. That is the point we are making. I hope I have made that clear.

Nonetheless, if I pay for a group of six people and leave a 15% service charge in cash, the employer seems happy to absorb that 15% into the system. There seems to be a slight contradiction between the two testimonies. Mr. Fenn spoke about being clear to the customer, whereas Mr. Cummins made a plea for the notice to be kept separate so the menu is not overburdened with information. In fact, he suggested wording on the menu telling customers to check a public notice for more information on how tips, gratuities and service charges are handled in the business in question. That wording seems quite long. It should be possible to simply provide the information in that many words. Would that mean that if customers wonder if their money will go to the staff they will all parade across the restaurant to look at a notice in the corner? The definition of service charge that has been put forward is startling and very different from the common understanding of a service charge. Does Mr. Cummins believe it would be appropriate for a note to be added every time a service charge is mentioned, clarifying that it is not a tip or a gratuity and will not necessarily go to the person who served the meal? I refer to restaurants where this is the case. Some restaurants may take a different approach.

Mr. Adrian Cummins

I thank the Senator for her question. Some restaurants or businesses may not have a menu which is presented to customers. The menu may be presented on a board, for example. We are trying to make it as easy as possible for both the customer and the business. I will give a simple example. The allergen declaration-----

Food safety is not-----

Mr. Adrian Cummins

The principle is the same. Legislation that is very important for food safety and the health of the customer states that the allergen declaration has to be in a prominent and accessible location within the premises. We are discussing the same principle here. A customer can look at a policy on the wall. If all the allergen details were printed on the menu along with the policy on tips and gratuities, details on service charges and whatever else arises-----

I was asking about a specific-----

Senator, please.

This is an irrelevance. Time is limited.

Mr. Adrian Cummins

-----there would be a book with one page featuring a menu and 50 pages featuring whatever other information must be given to customers. We are trying to make it as easy as possible.

I did not get an answer to my question. Since this is his understanding, does Mr. Cummins believe that where a service charge is mentioned, a simple phrase should be added to say it is not a tip or gratuity?

Mr. Adrian Cummins

It should be in a prominent location for the public to see.

As such, I do not know if I need to pay 15% or 30% extra for any money to reach a staff member.

Senator Higgins has made her point.

I know from talking to workers in the hospitality sector that there are some good restaurants, some not-so-good restaurants and some very bad restaurants. I have spoken to staff members who said that tips and service charges went to them. The situation is different in the Ivy and other restaurants around town, which apply a service charge on every single table. That is a cynical move by restaurants to avoid giving their staff tips so they can take that money and do what they want with it. At the same time, these restaurants refuse to pay the workers more than the minimum wage. This is an industry where workers are mainly on minimum wage. Should we consider making service charges illegal throughout the industry?

That is the first time that point has been made, but it occurred to me during the discussion that it is a point worth commenting on. It seems to me that staff make more in tips in venues that do not have service charges. The witnesses will probably agree with me. From the point of view of clarity, would it not be better if restaurants included the service charge in the unit price of the dish?

Mr. Adrian Cummins

I know I will frustrate the committee again by saying this, but we are precluded from telling businesses how to price their menus.

Mr. Cummins might bear with me for one moment. This would not mean telling a restaurant to charge €20 or €40 for a steak. This would mean requiring a charging structure, which is a little different. I am only making the point as a suggestion. The issue of service charges has caused considerable concern. Not every establishment applies them. Would it be better if the charge was absorbed into the pricing structure rather than being presented as an additional price? I ask Mr. Cummins to comment on that point because it is an important one.

Mr. Adrian Cummins

Several years ago, our association raised the issue of no-shows in restaurants, that is, cases where customers book tables and do not turn up.

When we mentioned pricing of deposits for no-shows, we received a five-page legal document from the Competition and Consumer Protection Commission. I am acutely aware, therefore, that if I answer this question, I will be notified by the commission. I can guarantee that. Perhaps the committee could bring the commission in and let it clarify that matter.

I take it that Mr. Fenn has the same view as Mr. Cummins on that point.

Mr. Tim Fenn

I will not comment on anything that would bring the wonderful people in the Competition and Consumer Protection Commission down on us. To suggest, however, that there would be legislation which could preclude a business from charging for service is, to my mind, possibly unconstitutional. Ultimately, one has a customer and a business offering a product or service. This is a willing buyer, a willing service and a contract. It is the same as any contract law anywhere in the world. If there are concerns about how employees in this industry are being looked after - and we are now seeking to create some new regulation to help and benefit them - this is what we should be focusing on. I do not believe it is an issue, but if there is concern around whether or not a particular charge or price is being used to divert moneys away from staff then the best way to deal with that is to be open and clear about what the policy is in the restaurant in that regard. The business - be it a restaurant or hotel - may decide to tell the customer that it keeps all the service charge, which is one option. The business may decide to tell the customer that all of the service charge goes to the employees. That might have to be couched with another six paragraphs to explain that taxation and other aspects have to be deducted. If it is decided, via this legislation, to outlaw the charging for service in a contract, I believe that would be way outside the remit.

There is another way of looking at this instead of putting it the way Mr. Fenn has just put it. He indicated that the legislation would preclude a business from collecting a service charge. As already suggested, where the service charge is at 12.5%, for example, in brackets after this the businesses could say "this does not go to the employee or the person who serves you".

We are talking about workers' rights. We can see that the concern is shared right across this committee. Why do both of the organisations refuse to engage with trade unions? Why do they both refuse to engage specifically with the JLC, which could set up a sectoral employment order to put a floor of decency under the sector to ensure that tips are given over to staff and there is a decent floor for wages? It is hugely frustrating that most of the decent people who work in this sector do not have a right to be represented by their unions.

Mr. Tim Fenn

In Ireland, every worker has the right to join a union, every employer has the right to recognise a union, every employer has the right not to recognise a union, and every employee has the right not to join a union.

I am asking why.

Mr. Tim Fenn

We have many members who engage at enterprise level with unions, and that works fine for them.

No, that is not the case.

Mr. Tim Fenn

I am sorry.

It is a fact that it is not the case.

Mr. Tim Fenn

We look after members who engage with unions.

What about with the JLC?

Please allow Mr. Fenn to continue.

The Chairman is right.

Mr. Tim Fenn

The Senator asked us to comment on JLCs. Those committees were completely frustrating to employers when they were in use. There were some 800 determinations based on the outcome of the requirement or the ask of the unions. Probably one or two were at the ask of the employers. In theory, a JLC will have the employers' representatives', the employees' representatives and an independent chairman. The independent chairman takes the submissions from both sides and then comes up with some kind of a recommendation. That goes to the Labour Court and, with the new structure, it then has to go the Minister for Justice and Equality. In the process of discovery in a previous case at the JLC, we found that the case submitted to the Labour Court did not include the employer's case. Full stop. There is no trust in how the JLCs work. In addition, we now have the national minimum wage, the Low Pay Commission and the structures that deal with that aspect. Within our industry we also have a structure, the quality employer programme, where we engage in what we believe to be best practice. It is our wish to make our industry an industry of preference for people. If we consider it from the macro point of view, in 2011 there was some 114,000 people employed in accommodation and food services, now there are 180,000 people employed. When we gross that figure up into tourism, there are now 270,000 people employed in tourism in Ireland. It is a massive success story. That happens because employers look after their people, and they are the best people to look after their people. If there is full employment Ireland, and if there is a massive increase in the amount of money going to the employees now, then this is a good thing. Maybe not all employers are happy with that, but this is the way it is. The reason we do not engage with JLCs is because those structures are for the past. They did not work for employers.

We are going to bring this session to a conclusion. There are three sets of additional witnesses waiting. I thank Mr. Lennon, Mr. Fenn, Mr. Cummins and Ms Sweetman for attending, for their opening statements and for the frank discussion they have had with committee members. I propose to suspend for a short time to allow the next set of witnesses to take their seats. Is that agreed? Agreed.

Sitting suspended at 11.30 a.m. and resumed at 11.40 a.m.

From the Low Pay Commission, I welcome Dr. Donal de Buitléir, chairman, and Mr. John O'Toole, secretary. From Unite the Union, I welcome Mr. Richie Browne, regional co-ordinating officer, and Ms Rhona McCord, strategic research, community development and communications support. I welcome Mr. Clement Shevlin, SIPTU organiser connected with the ONE Galway initiative. He is accompanied by Dr. Deirdre Curran, NUIG. I understand Dr. de Buitléir is under pressure from the point of view of time so he might contribute first. The same procedure will apply in the earlier session. If members want to ask direct questions, we will try to get direct answers.

I draw the attention of our guests to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity, by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

I ask everyone again to ensure that they have turned their mobile phones off or switched them to flight mode. All the opening statements have been circulated. I invite Dr. de Buitléir to go first.

Dr. Donal de Buitléir

I thank the members for inviting me to talk about the legislation the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, is introducing. The primary remit of the Low Pay Commission is to make recommendations each year to the Minister on the appropriate rate of the national minimum wage.

The national minimum wage establishes a pay floor below which no one should be expected to work. The commission seeks to recommend rates that will help as many low-paid workers as possible without any significant adverse impact on employment or the economy. While the primary role of the commission is to make recommendations on the national minimum wage we are also tasked, at the request of the Minster, to examine what is referred to as “related matters”. Since its establishment, the commission has reported on a number of issues, such as the preponderance of women on the national minimum wage, the sub minima rates of the national minimum wage, the allowances provided for board and lodgings and, most recently and the subject of this discussion, current practices in regard to tips under the national minimum wage.

In February 2018, the Minister invited us to examine the practice in regard to tips and gratuities as part of our work programme for last year and to make any recommendations we might consider appropriate. To help us prepare the report, we invited submissions from key stakeholders and individuals. We also advertised for submissions from the public. We engaged with the Workplace Relations Commission, WRC, and the Revenue Commissioners to gain further knowledge and insight into enforcement procedures and taxation matters, respectively. We also examined practices in other jurisdictions and considered how they might be applied in Ireland.

As with all of the commission's work, the consultation provided us with information that greatly assisted us in reaching our recommendations. Some submissions felt that employees should have more control over their tips and others favoured codes of practice. The Revenue Commissioners and the WRC were able to provide us with advice on the practicalities of introducing legislation in this area. What was clear from all of our engagement with stakeholders was that legislation or over-regulation in this area could result in a number of unintended consequences, which could result in less take-home pay for those employees concerned.

The Low Pay Commission's report reviews current practices and current legislation, sets out the consultation undertaken, the inputs received from Departments and agencies, a literature review, and then outlines our conclusions. In order to better understand tipping practices and the options available to Governments, the commission also examined selected international tipping regimes to look at best practice in other countries. The majority of submissions received by the commission advocated legislation focused on the hospitality sector. However, the consultation process has shown that tipping practices are prevalent in a number of other sectors. While there was broad agreement that the withholding of tips by employers is wrong, there was not agreement as to how this should be addressed.

Let me take members through the conclusions of the commission's report. While a number of groups have conducted some ad hoc surveys in this area, the commission was of the view, that insufficient data exist to show that employers withholding tips is a significant problem in Ireland. The commission concluded that regulation in this area could result in a number of unintended consequences, such as the reclassification of service charges, leading to a potential reduction in the take-home pay of low-paid employees. We also received a clear message from the WRC that legislation in this area might not be enforceable. The WRC emphasised that for enforcement to be viable and a conviction to be secured, it was essential to establish and clearly quantify the proportion of tips each employee is entitled to. The WRC has stated that, in its view, a better approach than legislation would be to introduce a code of practice on tipping. Furthermore, regarding legislation, while there was some support for legislation for the hospitality sector put forward in the submissions we received, the commission is of the view that this may not be appropriate for other sectors. Essentially, a one-size-fits-all approach is not recommended.

The commission noted that the advantage of such an approach would be that a code of practice could be tailored to the specific requirements of the industry involved. A code of practice could also ensure that both employer and employee interest groups are able to give input into the development of such a code and may therefore be able to take better account of issues as they exist on the ground. The commission concluded that, based on the experience in the UK, there is the strong possibility that if a code of practice were to be introduced in Ireland, it would not have the desired result in terms of ensuring that employees receive a fair share of their tips. The commission considered that there has not been a great deal of pressure from either employee or employer representative bodies to legislate for tipping or to alter current practices. The commission noted that this may indicate that the systems currently in place were working relatively well and that any attempt to interfere may lead to unintended consequences or legislation that would be difficult to enforce.

The commission's report was agreed by all nine members.

Mr. Richie Browne

I thank the Chairman and members for the invitation to attend.

Unite the Union welcomes legislation to protect the interest of all workers, particularly those working in low-paid and precarious employment. The hospitality sector is one where low pay and job insecurity are major problems for workers. Covering the cost of accommodation in the current economic climate requires a sufficient regular income for most people. Unite the Union welcomed the passing of the Employment (Miscellaneous Provisions) Act 2018, which provides some protection to workers on low-hours contracts. However, we believe more needs be done in a legislative framework to protect workers from exploitation, particularly those working in precarious employment, including those working in the hospitality sector.

The nature of the hospitality sector reflects some of the worst employment conditions in the State. It is a sector that is largely characterised by precarious employment, low pay, insecure and unsociable hours, exploitation and sexual harassment. Many of those working in this sector are on short-term contracts and part-time hours and, as a consequence, many are not earning enough money to qualify for income tax.

This is an issue which is specific to the hospitality sector, and Unite the Union believes it is necessary to have robust legislation in place that will prevent an employer from withholding any part of a worker's wages, including any monetary gifts received as tips or gratuities.

Furthermore, we believe that workers should have a legal right to those tips and criminal sanctions should be in place for any employer who engages in fraudulently confiscating them for any reason, including using them to make up the contracted wages.

Tips are confiscated from workers in the hospitality sector for myriad reasons, including to make up for breakages, a slow night or till shortages. The gratuity paid by a customer to service staff is not intended for any of those purposes. Gratuities are gifts from customers to service staff and should be treated as such. Monetary gifts of this nature and size are not and should not be considered taxable income. There is no need for the involvement of Revenue. The system of tipping staff works without difficulty in the pub and bar trade, where neither employers nor Revenue collectors are involved in the transaction between their customers and lounge or floor staff.

Unite does not agree with the findings of the Low Pay Commission in the context of placing the protection of tips on a legislative footing and believes that the research conducted by the Low Pay Commission was insufficient. Unite wants to see the introduction of better rates of pay in the sector. However, the insecurity and part-time hours that are common mean that many workers inevitably rely on tips in order to make ends meet.

Unite supports the legislation drafted by Senator Gavan, namely, the National Minimum Wage (Protection of Employee Tips) Bill 2017. We feel that the Bill, situated in the framework of employment protection legislation, is adequate to give workers in the hospitality sector a right to tips and gratuities that they earn, is robust in terms of sanctions for rogue employers and provides a mandatory requirement for employers to display their policy publicly, making it transparent for staff and customers. A clear commitment put on display by management outlining its policy will send a clear message to customers, encourage good working practice and benefit those good employers who do not engage in stealing from their staff. The Minister’s proposal represents a step back from Senator Gavan's Bill. It does not ensure workers a legal right to tips or provide a criminal sanction for bad employers who steal from employees. The Senator's Bill has been passed in the Seanad and has completed Second Stage in the Dáil. Unite would like to see it progress further.

I thank Mr. Browne. I invite Mr. Shevlin to make his opening statement.

Mr. Clement Shevlin

On behalf of the ONE Galway movement, which is a collaborative initiative between trade unions, student unions and community groups in Galway, I am pleased to address the committee on the general issue of tipping practices in the hospitality sector but with specific reference to our views on the general scheme of the Bill before it.

I will be blunt and say that the legislation being scrutinised today simply does not address the relevant issues relating to tips. In fact, it contradicts what has been stated by Fine Gael in various new media to the effect that the proposed legislation would give a legal right to tips for workers and staff. This is simply not true. The proposed legislation does not go anywhere towards addressing employees' right to tips, the lack of transparency for staff about what happens to their tips or, and equally importantly, transparency for the general public as to where their tips go. There is no legal protection for employees regarding tips being proposed in this proposed legislation. To propose that a bad employer would no longer be able to use a tip as a top-up to a contracted wage is a positive step, but it still allows for a bad employer to withhold that tip money to use for other business purposes, such as breakages, walkouts and entertainment. The general scheme of the Bill is shockingly silent on how tips should or could be distributed. Our extensive anecdotal evidence, and emerging independent empirical evidence, is that using tips to top up wages is a relatively minor issue compared to other reasons for withholding tips or, indeed, no reason at all besides the will of the employer. The proposed Bill will change nothing for vulnerable hospitality workers who are having their tips regularly stolen from them. In fact, it could mean that, because the employer cannot top up wages with the tip, the staff could end up back on the minimum wage with still no protection or transparency as regards their tip money.

Our campaign research has shown us that not all employers engage in withholding tip money, but since there is little or no transparency in the distribution of tips, it is unclear to employees what percentage of tips they are actually receiving, with some indicating that, on a busy week, they would receive the same tip money as on a slow week. This situation is enough to justify a definitive change in legislation to address this blind spot on the legal ownership of tips. Restaurants in Galway have endorsed and supported our campaign because they believe that legal clarity is required and only fair where tips are concerned. We suggest that the proposed Bill does not go far enough for workers, for the trade unions who represent them and for good employers within the sector.

This is a €5 billion euro sector, but one that has the highest percentage of minimum wage workers, who are the lowest paid and vulnerable workers in the economy. While we understand that tipping is arbitrary and discretionary and no substitute for a living wage, we are asking the committee to ensure that employees are able to take home the money that they actually earn. While we welcome the opportunity to discuss the general scheme of the Bill, other legislation that would address the concerns of workers is being held up in this very establishment.

I wish to take this opportunity to address some of the criticisms of the proposed Bill. The Low Pay Commission report issued recommendations without adequate consultation with workers or in-depth research into the sector, which my colleague will comment on in greater detail. We disagree with the Minister that this legislation is dealing with the more contentious issues relating to the treatment of tips, as we believe that it is more contentious that employees, under this legislation, would still not have a right to their tips. We also believe that the Private Members' Bill should not be allowed to be stalled in favour of this proposed Bill because of so-called potential unanticipated consequences. The unintended consequences for workers employed in this sector is not being able to pay rent, put fuel in their cars or continue in college because the tips they rely on - because they have to - are taken away from them with no recourse of action or right to resolve this.

Our estimates suggest that workers will not be faced with a massive tax bill by Revenue, given that their hours of work and earnings are such that the declaration of their tips for tax would barely raise them above the tax threshold. We have heard that the cost of the Private Members' Bill for the WRC and labour inspections would be too high for the Exchequer, yet the Minister’s office suggests that its own proposed amending legislation would be close to cost-neutral.

Our campaign is clear. It calls for greater transparency in the appropriation and distribution of tips in the hospitality sector and that employees have a right to their tips. How might that work? An example of how this might be implemented and deal with the transparency issue is the area of card tips. Acknowledging that we are moving towards a cashless society, with more and more tips being paid by card, securing at the very least the right to card tips for employees would address the issues raised at this meeting, those being, transparency in the system and the right to tips. It would provide transparency to customers, who would know that the tip on the card would be received by workers, which is not the case currently. It wold provide transparency for staff who would have a record of tips paid through the card system, which could then be transferred to payroll and distributed in an agreed manner among the staff. It would provide transparency for employers, who would know that customers deliberately made a payment on their card intended for the staff. With the card tips separated out, they could be seamlessly transferred to the payroll system, from which it would be distributed in an agreed and fair manner based on a pro rata of working hours, with tax already paid via payroll. The transparency of such a system would mean the sticker of notice on tips policy would have genuine legitimacy. As the payments would already have been recorded, there would be little additional cost to the employer, and this system would also provide evidence of practice.

This provision would bring the Minister’s proposed Bill a little closer to giving workers protection of their tips and transparency for customers, and be something good employers would surely support.

I thank Mr. Shevlin. I will allow colleagues to put their questions individually and the witnesses might respond to them. We will try to go through them quickly. I ask colleagues to be direct and specific.

I thank our guests for attending, for their opening statements and for their ongoing work on the issue, particularly that of ONE Galway and Unite. The Low Pay Commission has also played an important role, and I will start with Dr. de Buitléir. The Low Pay Commission carried out a review.

In his opening statement he was critical of the absence of reliable data and used the words "ad hoc surveys", which is a disappointing use of language. Much evidence and very useful data have been collected which have lifted the lid on the prevalence of the theft of employees' tips across the board. Even in his review he highlighted the lack of data. When the Low Pay Commission was examining this did it seek to carry out its own analysis? Did it commission any report examining the area?

Dr. Donal de Buitléir

I did not mean any criticism or anything pejorative and if I gave that impression, I withdraw it. We did not commission a specific report or survey on this. First, we advertised for submissions and received quite a number. Also, and this has been very helpful in our work, we go around the country talking to individual employers and unions and a number of issues come up in those discussions which give us great insight into issues on the ground. The tips issue has not really surfaced in those consultations.

That is anecdotal evidence as opposed to solid-----

Dr. Donal de Buitléir

Yes, but I find it particularly helpful to talk to individuals. We have meetings with individual workers who talk about the issues that affect them. There are issues, but this one has not surfaced in particular.

Okay, but no comprehensive research was commissioned or carried out by the Low Pay Commission.

Dr. Donal de Buitléir

No.

That report is being used against the exploited workers in the area, which is most unfortunate. It would have been helpful if detailed analysis had been carried out by the Low Pay Commission before it made its recommendations.

I have a question about the unintended consequences. Dr. de Buitléir said that much of the focus, correctly, has been on the service charge and that there might be unintended consequences to reclassifying the service charge, such as a reduction in take home pay for workers. However, unions say that from their engagement with their members that absolutely would not be the case. I am not sure whether Dr. de Buitléir was here for the contributions from industry representatives earlier-----

Dr. Donal de Buitléir

I heard some of them.

-----but they told us that they do not believe the employees have a right to the service charge. That cuts to the fundamental issues here. Does Dr. de Buitléir think that reclassifying the service charge, which consumers unfortunately believe goes directly to the staff, would not increase the take home pay for employees? We have heard, and there is evidence, that people wrongly think that money goes to the workers and therefore do not pay a tip or gratuity.

Dr. Donal de Buitléir

When they pay the service charge most people believe that it goes to the individual worker, and most believe that it should. People who pay the service charge would be extremely concerned if they thought that was not the case. They might change their behaviour. Part of the issue if legislation is introduced, and there is no argument about the principle here, is whether what we are trying to do will make things better or deal with the issue. There was a concern in the commission that if legislation was introduced the typical service charge of 10% or 15% might be reduced. That could affect the take home pay of workers in particular cases. That was a big concern. There is no dispute among the members of the commission about what is the right thing to do here. The question is what is the best way of ensuring that it is done.

Perhaps the union representatives will address that specific point. The previous witnesses were of the view, which they expressed quite directly, that the service charge was part of the revenue stream to the business and tips and gratuities were to be dealt with differently. That sums up the general argument. I not want to have to repeat the points so if you have a view on it, you should state it now. It would save everybody having to repeat that point. However, it came across quite strongly that the service charge, whatever the rate, was part of the revenue to the business, and tips and gratuities were directly the responsibility of the employees. Do you wish to comment on that?

Mr. Richie Browne

I was here for that testimony and I listened to it intently and with some alarm. It appears that the previous contributors were saying that the definition of a service charge is interpreted and decided solely by the employer. Some employers can decide to treat it like a tip or a gratuity and give it to the staff in addition to their contracted wages, some employers will decide it is a service charge to be absorbed by the business while some employers might decide to use it to subsidise the staff's wages. That is not helpful. It is very confusing and open to arbitrary interpretation by employers. We would welcome a definition and greater clarity in that respect. A suggestion was made that the employers should provide clarity either through public display of a notice or a notice on the menu stating how they treat the service charge and whether it goes to the employees. For argument's sake, an employer could say, either on a public notice or on the menu, that all the service charge goes to his or her employees, but that does not mean it goes as a tip in addition to their contracted salary as it could go to making up their contracted salary. Even though the employer would not be telling a lie, it certainly could be very misleading.

Does Mr. Shevlin or Dr. Curran wish to comment on the same issue?

Mr. Clement Shevlin

It was clearly evident in the discussion that they were adamant that the service charge was theirs and that it was a business contract. People do not go to a restaurant and sit down for a meal to enter a business contract, especially when they do not know where it goes. A business contract comes with detail. This comes with two words, "service charge". They were quite adamant, in fact I thought they were lobbying for Senator Gavan's Bill, and all in agreement in saying that tips should go to the employee, yet they do not want progress made on that in legislation. They are supporting a Bill that does not provide that. Doing so is wish-wash, while at the same time telling legislators in the legislative Chambers that they have a business contract with customers, which is official and not to be touched. Legislators can do what they like and give them their tips all day long, but they cannot touch this with no transparency either for the public or for the worker in the sector. As the Chairman said, in any place where there is a service charge there are fewer tips for the workers there. If we are talking about unintended consequences for workers and saying that this legislation will bring unintended consequences, we are ignoring the current consequences of abused vulnerable staff that have a wider effect on society.

I thank the witnesses for their contributions.

It might be helpful to hear some details of what actually goes on in the industry from Ms McCord and Dr. Curran who have carried out the research. Some people may have read all of the details and are very familiar with them, but others may not have done so. Fleshing out the matter might be helpful.

Ms Rhona McCord

I disagree with the Low Pay Commission's statement that not enough research has been carried out. It is unfortunate that it did not conduct a survey or interview people. Going to unions to ask about this issue is problematic because the sector is very much non-unionised and it is an area in which it is notoriously difficult to organise owing to the nature of the work involved, but we have attempted to do it. In the past fortnight we have been all around Dublin city centre talking to workers. One member who worked in the sector for 11 years and is present in the Visitors' Gallery would say that of the nine places in which she worked only one gave her her tips, in other words, eight did not. That is the experience she is picking up from others on the ground. People are saying that when they go into a restaurant and ask directly what is the workers' experience, they are told everything we outlined in the opening statement. Apart from the theft of wages through holding on to tips, there is insecurity in the hours and shifts worked which change constantly. It is used as a means of control. Sexual harassment is a huge issue for female workers in the sector. There is also the question of safety in getting home from work. Sometimes, if workers do not receive their tips, they cannot afford to take a taxi home late at night. The feedback we have received emphasises the precarious nature of the employment. Other research has been undertaken. Sinn Féin undertook a survey, as has SIPTU. As Dr. Curran is probably the expert and has done a lot of work on the issue, I might ask her to explain.

Dr. Deirdre Curran

I am an academic at NUI Galway and obsessed with data. When the Minister, Deputy Regina Doherty, said on national radio that employers in the hospitality sector, in the main, treated their staff the way one would like members of one's family to be treated, it was very frustrating as she had no evidence to support that statement. Until recently we have had very little evidence to refute it. I have some sympathy for the Low Pay Commission because, as has been mentioned, while it did consult union representatives, the sector is largely non-unionised. Therefore, how does one get at the people most affected? The screamingly silent voice in the Low Pay Commission's report is that of the workers.

I have embarked on a path to try to address the lack of empirical independent evidence on working conditions in the hospitality sector. It is part of a research agenda that is ongoing and it is revealing shocking levels of ill-treatment and the abuse of workers' rights. I have said repeatedly that the non-payment of tips is only the tip of the iceberg. My research addresses the issue of tips, but beyond it there is a culture of ill-treatment within the hospitality sector. While we had some anecdotal evidence - most people on the street had an awareness of it - we had no solid evidence.

From my research undertaken recently, 76% of respondents had experienced verbal abuse, either sometimes or often; 64% had experienced psychological abuse, either sometimes or often; while 15% had experienced physical abuse, either sometimes or often. That is a low number, but what number would anyone care to see for the number of people experiencing physical abuse, either sometimes or often? When asked when they were abused and who was the likely perpetrator, the responses were overwhelmingly that it was by someone in a position of power such as a chef, an owner or a manager. Respondents were asked to whom did they report the abuse and overwhelmingly the answer was "nobody". Those who had reported it were asked what was the outcome. Only 15% said action had been taken to address it.

I am referring to survey data. The survey was comprehensive and included 38 questions.

Sexual harassment is prevalent. Some 55% of 257 respondents had witnessed or experienced harassment. The most common forms of harassment were sexual, based on age or race. Some 63% had witnessed or experienced bullying. Some 48% said they have no access whatsoever to a voice in the workplace. Clearly, they are crying out for voice.

In the final question in the survey respondents were asked to leave their details if they were willing to speak to the researcher. I had hoped for ten or 15 to go into more depth but 100 left their details. That sent me into a panic as I had no resources or funding in carrying out the research, but I wanted to give a voice to anyone who wanted to have one. I have offered people the opportunity to send me an audio file in responding to three questions: what do they like about working in the hospitality sector? What do they not like about it? Would they like to tell me about an incident in which they felt they had been unfairly or badly treated and what happened? What action did they take? What was the outcome and how did it make them feel? If people do not want to make an audio file, I will meet them face to face. I have travelled around the country to meet them. I have been researching for three decades and never conducted research that has kept me awake at night. The people in question are crying out for a voice and protection.

Focusing specifically on tips, 23% of respondents said they were kept in whole or in part by management. Some 47% said there was some system in place for distributing tips, but it was unclear or not considered to be fair. When asked for what tips were used, the responses included that they were used to cover the cost of the staff party which sometimes did not even happen, to cover the payment of a Christmas bonus - the relationship between the tips and the bonus paid was not clear - to top up the till, to pay for newspapers, to pay for walkouts and to pay for breakages. Not one person said tips were used to supplement their wages.

The Bill proposed by the Minister addresses something which, from my research and that undertaken by the Union of Students in Ireland and the Galway Hospitality Campaign, is a non-issue. There is a massive issue about tips being stolen from employees. I noted that the employer bodies had taken exception to use of the term "stolen", but what does one call it when money intended for one person is taken by another?

As well as asking discrete questions such as whether workers had received a fair share of tips, respondents were invited to submit more detail. The average time devoted to responding to the survey was 20 minutes, which is comprehensive in a world where people do not like taking surveys and their average attention span is 2.5 minutes. Many gave a great deal of data and are continuing to do so on the audio files and in the interviews I have been conducting. One of my favourite quotes was that, according to managers, all of the tips in the establishment were given to a children's hospital, but the respondent had never seen any proof of this and that it was widely believed to be a lie.

That was very helpful. That testimony would prove to be very helpful to the Low Pay Commission. I assume that it has not looked at it.

Dr. Donal de Buitléir

I gather it was undertaken after our advice had been given, but we are really keen to pursue this issue.

Obviously, it would be a good idea for us to put the Bill on hold in order that the Low Pay Commission could review the advice it has given on the Bill. Clearly, it is not ill-advised, but there is a gap in the advice it gave. There is a huge void in the information and the robust advice it has given to the Government to support the Bill. Clearly, the Minister, as she did in the case of Sinn Féin's banded hours Bill, is trying to head off Senator Gavan's Bill and produce her own when the unions which are well placed to judge state Senator Gavan's Bill would do a hell of a lot more to address the problem in the sector. Does the Low Pay Commission not see the huge irony in the advice it gave to the State on the Bill being excepted, while the advice it gave on increasing the national minimum wage by 30 cent an hour was rejected in the latest budget? The Government's attitude was to forget about the commission's advice on increasing the national minimum wage by 30 cent in the budget, but it is prepared to accept the advice on the Bill.

Dr. Donal de Buitléir

The Deputy is right. Our job is to give advice and the Government has to decide whether to accept or reject it. My understanding, although much has happened in the past couple of days, is that the Government has accepted the recommendation a majority of the commission made to increase the minimum wage by 30 cent to €10.10. We did not recommend a particular date on which that might be operative. My understanding, subject to correction, is that the Government is waiting to see how the current uncertainty-----

I ask Dr. de Buitléir and Deputy Smith to try to bring the discussion back to the Bill. This is pre-legislative scrutiny.

Dr. Donal de Buitléir

My apologies.

I know what point the Deputy is making.

The point I am making is political but the Minister's attempt to usurp Senator Gavan's Bill is-----

I take the Deputy's point. The committee will deal with Senator Gavan's Bill.

I have a final question for the Low Pay Commission. The profits in the hospitality industry have increased beyond pre-economic crash levels. We all see service charges on the menu in restaurants and many of us do not leave a tip because we believe a tip is paid when we pay the charge. Does Dr. de Buitléir have an opinion on the view that service charges not being returned to workers has helped to increase the hospitality industry's profits to the current level?

Dr. Donal de Buitléir

The service charge should be passed on to workers. Everyone who looks at this issue would agree with that.

Everyone except the employer.

Dr. Donal de Buitléir

That may be the case with some employers; I do not know.

That will be part of our report.

Dr. Donal de Buitléir

If employers are retaining some element of the service charge, it follows that that increases their profit or reduces their losses in some cases.

I thank the witnesses for their testimonies. I also thank Dr. de Buitléir for his presentation. The Low Pay Commission has done some very good work. I had wished for adequacy of income to be included in its mandate. That was an unfortunate omission at the time of founding. I regret also that its recommendation in terms of the minimum wage has not been implemented. That is an unfortunate decision.

When the commission produced the original advice following its examination of this issue, its concern regarding legislation was about unintended consequences and it explicitly mentioned the reclassification of service charges. From his testimony, I understand that one of Dr. de Buitléir's concerns in respect of service charges at that time was that they would be reduced. The understanding of the Low Pay Commission, as I am hearing it from him, is that service charges were effectively gratuities and were destined for the worker. One of the commission's concerns was that the level of that gratuity through a service charge might be reduced and a figure of 10% was mentioned. Given that concern at the time, how much more concerned is the Low Pay Commission by the proposal to reclassify services charges as not being gratuities and in no way linked to the worker? That proposal is in the Government Bill and it has been made by the Irish Hotels Federation and the Restaurants Association of Ireland. With its proposal on removing service charges from workers, is this Bill an example of the concern the Low Pay Commission expressed? Is Dr. de Buitléir surprised to see it in the Bill, given that the commission had already flagged that concern in its advice to the Government?

Dr. Donal de Buitléir

My view and the view of the commission is that service charges should be for the workers. The other consideration that weighed on the commission was the very strong evidence we got from the Workplace Relations Commission. We are strongly influenced by the view that passing legislation is fine but if it cannot be enforced effectively, it is not a good idea. That was a big consideration in the-----

On service charges specifically, is Dr. de Buitléir concerned about the proposal that they should be removed from the gratuities classification? Was he surprised to see that in the Government Bill given that it seems to go against the advice the Low Pay Commission gave?

Dr. Donal de Buitléir

We give advice and sometimes we are right and sometimes we are wrong. It is sometimes accepted and sometimes rejected. We do the best we can. We have a broad and experienced commission, with very experienced people on the employer and employee sides, as well as some independent persons. We do the best we can.

The proposal in the Government Bill to remove service charges from gratuities is an example of something Dr. de Buitléir would be concerned about when he mentioned reclassification.

Dr. Donal de Buitléir

If it reduced the income of employees, the members of the commission would be very concerned about it.

Dr. de Buitléir mentioned the Workplace Relations Commission. It referred to a code of practice but I understand the opinion of the Low Pay Commission was that a code of practice was unlikely to work. Will Dr. de Buitléir elaborate on the reason the commission believes it would be unlikely to work?

Dr. de Buitléir mentioned sectoral agreements. Does he believe a joint labour committee, JLC, or other sectoral agreement may be a better approach for this sector?

Dr. Donal de Buitléir

I am not personally familiar with how the JLC works but from the discussions we have had in the commission, that is a very good way of dealing with the problem. It also means that different sectors can do different things.

I also asked about a code of practice.

Dr. Donal de Buitléir

A code of practice would not solve all the problems and we had evidence from the UK that it did not do so there. However, it would be a step forward. If there is transparency, public information is always helpful. It will be done mainly by the compliant employers.

Dr. de Buitléir stated that if persons knew a service charge did not go to a staff member, it might change customers' practices. If the Low Pay Commission had known that the requirement to give service charges to staff would be removed, would that knowledge have changed some of the commission's analysis?

Dr. Donal de Buitléir

We would have to discuss it with the commission. I am just one of nine members trying to reach some sort of agreement.

Dr. Deirdre Curran

I will comment on sectoral agreements. I am here as an independent academic. Based on the research I have done, workers within the hospitality sector have no voice. Less than 7% of them are members of a trade union. In the survey, I asked workers if they would be willing to join a trade union. Many of them said they would be willing but the main reasons they cited for not joining a trade union were, first, fear of the employer's reaction and, second, apathy in the sense that nothing would get better in the sector. My firm belief is that it would be incredibly difficult to unionise workers in this sector because of that fear. My view is that we need some kind of sectoral agreement at national level - a collective agreement between employers and worker representatives - on levels of decency and compliance with employment rights.

I will pursue the issue of service charges. From the earlier contributions of the restaurant owners and hoteliers, they appear to be very eager to have this Bill passed as it will reclassify what is commonly understood to be a service charge. We have to be very concerned about that and get out that message. The Low Pay Commission should review the report it issued on the basis that service charges, which it believed were going to workers, are not going to them. It could express concern about what is being reclassified by the hoteliers and restaurant owners.

Dr. Curran is right that only 7% of workers in the hospitality industry are members of trade unions.

A targeted campaign is being conducted by the Unite union whereby it is going into workplaces, talking to workers and encouraging them to get active and raise their voices. A meeting will be held on Wednesday, 16 October in Wynn's Hotel and we hope large numbers of workers will attend and give that screaming, silent frustration a voice. That said, it is going to be very difficult to organise. Julia, who is with us today, worked in the Ivy restaurant but was sacked for joining a union. She is now organising the hospitality sector in Dublin. Her experiences in the restaurant trade were both good and bad but mainly bad. There is a real need for the Legislature to pass a Bill that is worth the paper it is written on. Hopefully, the Low Pay Commission will review the report it prepared.

Would anybody like to comment on those points?

Dr. Donal de Buitléir

Unfortunately, I have to leave now because I have to catch a train. I do not mean any discourtesy to the committee and am willing-----

To be fair, Dr. de Buitléir had informed the committee that he would need to leave-----

Dr. Donal de Buitléir

I am happy to deal with any questions through the secretariat and will try to help the committee members-----

Very briefly, does Dr. de Buitléir regret not conducting research, given what we have heard today? Is the report not fundamentally flawed, given that the worker's voice was not part of it?

Dr. Donal de Buitléir

That is a point that I will take back to the commission.

That is good..

The clerk of the committee will correspond directly with Dr. de Buitléir on any additional items of relevance to him or the Low Pay Commission that arise. I thank him for his attendance today.

Dr. Donal de Buitléir

I appreciate that.

Mr. Clement Shevlin

In terms of getting out there, meeting people, chatting to them and discovering the issues within the sector, what Dr. Curran has told us makes it clear how bad the situation is on the ground. Tips obviously did not come across the radar of the commission, not to mention the other issues. Low density in the sector is a significant issue but the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, stood up in the Dáil and said that the people in question were not even in a union, as if they were not important. They are the people who form the basis of our society. They are the people who, as Michael D. Higgins has said, are not able to participate in society. People talk about profits rising and about wages but we are talking about wageless growth in Ireland. Production levels are going up and profits are going up but people are on stagnating low wages, which is having a damaging effect on society. It must be addressed in these Chambers.

Dr. Deirdre Curran

The issue for me is that there is an endemic culture of ill treatment within the industry. Unfortunately, there is also an acceptance by workers that there is nothing they can do about it or that this is just how it is. If the committee would humour me for a minute, I have some direct quotes from workers who took part in the survey. One worker said: "I have often been sweared at, called stupid and useless, the same as my other colleagues at work. My boss would throw punches at the wall, throw a chair at one of the workers and insult the way I look and talk. Apparently I sound like a robot.". Another said the following: "I am treated like a horse as they feel I am able to do five people's work instead of one person's work. It is so hard to work in a place that expects you do to everything." I have one more quote, as follows: "I was told to suck my manager's penis because I could not bring the lemons fast enough." There are reams and reams of testimony from workers about how badly they are treated at work. This is a screaming issue that needs to be addressed.

Ms Rhona McCord

Just to follow up on that and the point that Deputy Joan Collins made about the urgency of the issue, the lack of a 30 cent pay rise was highlighted by Social Justice Ireland. It said that those who need that pay increase are the people who are least able to cope with a crisis, given their already low wages. To defer that pay increase because of issues that might arise in the context of Brexit has a really big impact on the people to whom we are referring. They are the people who are least able to absorb any shocks resulting from Brexit.

In the time remaining, I ask members to focus on the pre-legislative scrutiny aspect because we are going to have to deal with it as a committee.

That is where I want to start. I thank the Chairman for his generosity, given that I am only a guest at this meeting. This Bill, as proposed by the Government, does absolutely nothing. We have heard from the independent researcher here that it does not address the key issue which is the theft of tips. It is shocking. Naturally, we have focused on the service charges and I will read the definition of same contained in the Bill that passed Seanad Éireann with the support of all parties except Fine Gael. It reads as follows: "a service charge or similar charge imposed by an employer on a customer in such circumstances that a reasonable person would be likely to infer that the customer intended or assumed that the payment would be redistributed to an employee or employees". That is the definition we need. The reason that the hotel and restaurant folk got so upset about our Bill, which received wide support, is that they are terrified that the service charge con job that has gone on for years is going to be stopped.

I am stunned by the quotes read out by Dr. Curran and I do not think I could follow that. What do the witnesses want to see done next? How can this committee, of which I am not a member, and the Oireachtas help to tackle this dreadful issue of tip theft?

Just before the witnesses answer, to provide clarity for members and witnesses, we are engaging in pre-legislative scrutiny of a Government Bill but the Bill to which Senator Gavan is referring has been through Seanad Éireann and is on Second Stage in the Dáil. This committee will deal with those Bills individually. It is up to the Business Committee and others to schedule them and so on but as a committee, we will deal with each item as it is presented to us.

Dr. Deirdre Curran

There is sufficient evidence to indicate that there is an issue with tips being withheld from staff but the Bill proposed by the Minister is not going to address that. Tips are one small issue in a much broader culture of ill treatment. If we cannot get this bit right and if we drag this out, what hope do we have of addressing some of the more sinister issues in the hospitality sector?

Mr. Clement Shevlin

This Bill has no substance whatsoever in terms of addressing the issue of tips. It does not give any legal protection to workers and is hocus-pocus. We need to devise measures based on consultation with those working in the sector and not just with employers. The focus must be on the legal right of workers to their tips and on tips being a supplement to wages and not a replacement for them.

Does Ms McCord or Mr. Browne wish to comment?

Ms Rhona McCord

No.

Mr. Richie Browne

What I have heard this morning is the question as to when a tip is not a tip. It is suggested that a tip is not a tip when it is a service charge, depending on the employer but that leads to confusion, a lack of clarity and is open to interpretation by the employer. This current Bill does not give the clarity required in that respect. If I get into a taxi, I will give the driver a tip, unless he or she is particularly rude or is driving dangerously. In the vast majority of cases, I will give the driver a tip. If I order a pizza or a curry to be delivered to my door, notwithstanding the fact that there is a delivery charge, I will give the delivery driver a tip. There is no issue or problem with that because there is no opportunity for a third party, namely, the employer, to intervene or interfere in that transaction. It only becomes a problem when the employer has an opportunity to interfere and intervene in the transaction and then one cannot be assured that the person for whom the tip is intended will actually receive it. That is the issue and the problem. We need regulation and legislation in respect of that and with all due respect, the Government's Bill does not provide what is needed. Senator Gavan's Bill is much better placed to deal with this issue.

I thank Mr. Browne. I will now take final comments from members and then from our witnesses, if they have anything further to add. Deputy Brady is first.

I appreciate that Dr. de Buitléir had to go for a train but I wish to go back to a point that was made by a couple of members. A lot of the work by the Low Pay Commission has been based on no data but it is being relied on by the industry and the Minister. The Irish Hotels Federation goes to great lengths to promote the review of the Low Pay Commission and that is frightening. Dr. de Buitléir said he would bring it back to the other eight members of the commission. This is important and some of the organisations represented on the Low Pay Commission have also changed their viewpoints. It would be useful if the commission could be contacted after its members have met on this.

We will correspond with Dr. de Buitléir on foot of today's meeting. He said he would revert to the commission and we will ask him whether he stands over his report or wishes to amend it based on what we have discussed.

I do not think the Minister has used the advice of the Low Pay Commission. In the Bill that she has put forward, she has disregarded the main concern of the commission by reclassifying the service charge to reduce take-home pay. Senator Gavan's definition seems to put down on paper the common understanding of the witness from the Low Pay Commission. I regard this not as a reclassification but a clarification.

Does Dr. Curran or Ms McCord think that, if we were able to bring Senator Gavan's Bill forward before Christmas and action was taken relating to tips, it would give encouragement to workers who are currently in despair, especially in terms of the issue of union membership? How important is Christmas for tips?

The Minister claims Senator Gavan's Bill would have unintended consequences resulting in tips having to be taxed and made subject to USC. I find that contradictory and ironic, when the State has just given the special assignee relief scheme, SARP, to very wealthy and highly-paid executives to enable them to avoid tax on all their income. There are ways and means to ring-fence the money to stop it being taxed and subject to USC. If they can do it for the very wealthy they can do it for the most vulnerable and lowest paid. The Minister is using the usual mechanisms to hold back a progressive Bill that has already gone through many stages in the Oireachtas. The Low Pay Commission could play a key role in reviewing its recommendation in this area.

I wish to make a plea, not just to the members of this committee but to civil servants, who I hope are watching this somewhere, to look at my Bill and work with me. My Bill is not perfect and I am happy to look at changes to it, but I want to protect workers, as I think everyone does. The Bill has passed in the Seanad and has passed Second Stage in the Dáil. We can do this but the Minister appears to be the stumbling block. The Minister's Bill is a diversion and we can, and must, do better.

Dr. Deirdre Curran

To answer Senator Higgins, if Senator Gavan's Bill goes through it will give confidence to the workers affected. These workers feel abandoned and feel like they have neither a voice nor support. ONE Galway handed out postcards on St. Valentine's Day and at Christmas in support of Senator Gavan's Bill. It suggested to people on the street that if they were going to have a meal, they should ask where the tip goes. When I ask in restaurants where the tip goes, they say many people are asking. They know that there has been a focus on the tips Bill. I teach employment relations to hundreds of students every year and they are acutely aware that this is happening because I bring my research into the classroom. Many of them work in the hospitality sector and this would give them confidence to speak up about other issues and to look for support elsewhere. It is one indication to hospitality workers that somebody out there is willing to take action on their behalf.

Mr. Clement Shevlin

At the earlier meeting it was suggested that this Bill gave no protection but the Irish Hotels Federation and the Restaurants Association of Ireland wholeheartedly support employees getting their tips. If they are saying it, the Minister is doing them a disservice by bringing forward a Bill that does not support it. If it was brought in now it would bring about a sea change in how workers feel about their workplace and their entitlements and around the question of who is there for them. There has been a breakdown in society with things like Brexit and people are losing faith. There is a disconnect and people do not feel anybody in here represents them. ONE Galway works with community groups and student unions. More people did not vote in local elections than voted and the ones who did not vote are those vulnerable people who do not get to participate in society. Anger and apathy build up. They are waiting for somebody like Senator Gavan to put a Bill like this forward. They are not in unions but we still campaign for them because it is an issue of social justice and we cannot ignore the people in the sector. It would give us a pathway to get better results for them. They should be on a living wage and not sitting around wondering whether they will get their tip or not. We have to have transparency for the customer and for employees.

Ms Rhona McCord

I agree with the comments of other people. If Senator Gavan's Bill is not progressed but the Minister's is, we would have to look at serious amendments to make it worthwhile for workers, which sends us back into a loop. We have already come a long way and we would prefer to get Senator Gavan's Bill done with urgency. Winter comes with extra expenses and these workers are already relying on their tips. When they are taken away for whatever reason it could mean the difference between whether they can pay their rent or not, or buy food or not. We want this to progress quickly.

Mr. Richie Browne

The vast majority of people working in this sector are among the most vulnerable in society. There are a huge number of foreign nationals, women and young people at college. Because of fear, they do not have collective representation even though they have the right to it. The employers refuse to sit down and engage with the JLC despite the fact that the JLC works very well in the cleaning and security industry.

They are refusing to sit down and engage with a joint labour committee, JLC, despite the fact that the JLC for the cleaning and security industry works very well. The employers are refusing to engage with a joint labour committee. In the absence of collective organisation, a national agreement, or an employment regulation order, ERO, arrived at through a JLC, these workers need to be protected to the greatest extent possible though legislation and regulation. Unfortunately, this Bill does not provide that protection but, as we have said already, Senator Gavan's Bill does.

That concludes today's meeting. I thank our witnesses very much for their attendance. Their written opening statements and their contributions to the discussion have been very helpful and informative.

The joint committee adjourned at 12.50 p.m. until 10 a.m. on Thursday, 24 October 2019.