Dáil service charge and tips debate

IN a debate with potentially major ramifications for Kerry’s hospitality sector the Dáil has been holding hearings on reform how tips and service charges are used and levied.

Several Representatives of the Irish Hotels Federation and the Restaurants Association of Ireland were at Leinster House last week where they tabled their opinions on mooted new legislation at the Oireachtas Employment Affairs Committee.

In a key submission the IHF and RAI representatives argued that service charges added to meal bills are not tips and, as such, could legally and correctly be used to defray wage costs.

However the IHF and RAI have voiced support for the proposed Government bill that would explicitly outlaw the use by operators of tips to cover wage costs.

“One hospitality worker who does not get their tips is one too many,” said RAI chief Adrian Cummins at the hearing last week.

A draft of the Government proposal draws a “welcome distinction between tips and service charges”, Mr Cummins said.

Service charges were not tips, he told the committee.

Mr Cummins said he welcomed the proposal that all outlets would be obliged to post their policy on tips and service charges in a public place.

IHF chief executive Tim Fenn said that restaurant owners “may decide to add a service charge based on the service they provide. That’s their business. They get to decide what to do with it”.

Mr Fenn said even tips added to a bill using a debit or credit card increased tax and other obligations for restaurant owners.

As a result he said tipping directly with cash is “the best way for it to be handled, full stop”.

Meanwhile Unite official Richie Browne has said unions will oppose the Government’s plans because they “do not provide a criminal sanction for bad employers who steal from employees”.