Background:
The Complainant, a waiter, began working at a hotel in the Midlands in March 2023, having previously worked at an associated business in Ireland since October 2022. He earned €12.50 per hour and €13.50 on Sundays, working regularly between 35 to 40 hours per week, despite being on a contract for only three hours a week.

In July 2023, the worker resigned and brought a dispute to the Workplace Relations Commission (WRC) concerning the distribution of tips at the hotel. He claimed he did not receive tips intended for staff and was pressured to leave after raising this issue. The worker stated that despite generous customer tipping, he was instructed to hand over all cash tips and received only a small fraction in return. He complained to HR and was subsequently threatened with reduced working hours and dismissal by the general manager.

The worker also reported workplace abuse by a manager and claimed his suspension was unjust, alleging it was a tactic to force him to resign. Eventually, he left after his wages were withheld. He raised these issues with the WRC, but the employer chose not to respond to the claims during the hearing.

Finding:

The Adjudicating Officer noted the dispute centred on the worker's claim that the employer failed to distribute customer tips in the hotel restaurant. After raising a complaint about this, the worker claims he was forced to leave his job due to mistreatment.

It was held the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 entitles employees to a share of electronically paid tips but does not regulate cash tips. Employers are required to display a notice detailing how both cash and electronic tips are distributed, but the employer provided no evidence that such a notice was displayed. The worker alleged he was instructed to hand over all cash tips and was later suspended after raising the issue with management, which led to his resignation.

The Adjudicating Officer noted that the worker claimed to earn more from tips than his weekly wages, which averaged €500; and estimated receiving around €500 per week in tips from customers, potentially amounting to €8,000 during his employment, with €5,000 possibly retained after sharing with kitchen staff. The employer did not dispute the worker’s claims. The Adjudicator found it reasonable for the worker to seek other employment due to the suspension and withheld wages, concluding that a formal grievance process would likely have been ineffective. In compensation for the employer’s failure to pay the worker the tips he earned; it was recommended that the employer pay compensation of €7,000 pursuant to s.13 of the Industrial Relations Act 1969.

Practical Guidance for Employers:
Employers should:

• Understand Tip Regulations: Ensure compliance with the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022.
• Display Tip Notices: Prominently display a notice explaining how both cash and electronic tips are distributed among employees, as required by the law. Failure to do so can lead to legal disputes.
• Fair Tip Distribution: Transparently manage tip distribution, ensuring employees receive what they are entitled to, and avoid instructing staff to hand over cash tips without clarity.
• Avoid Retaliation: If an employee raises concerns, address them professionally. Retaliation, such as reducing hours or suspending the worker, can lead to claims of constructive dismissal.
• Record-Keeping: Maintain clear records of tips distributed and hours worked to avoid disputes.
• Respond to Legal Claims: Engage in disputes promptly to avoid unfavourable findings.

The full case can be found here:
https://www.workplacerelations.ie/en/cases/2024/august/adj-00046780.html