Temper Works, which provides workers for hospitality clients in the UK, said in a briefing that gig workers and self-employed workers sourced through its platform fell outside the Employment (Allocation of Tips) Act.
The legislation came into force in October, and requires employers to split tips between all workers and temporary agency staff. Bryan Simpson, a Unite lead organiser, told the Guardian that Temper Works’ attempt to dodge the tipping legislation was “morally reprehensible”.
Temper Works, however, denied Unite’s claims and said it operated “transparently and according to UK law”.
Employers who operate in England and Wales should comply with the new tipping legislation, according to Gemma Clark, employment lawyer at law firm Wright Hassall.
Read more: Why HR needs to know about the new law on tips
Speaking to HR magazine, she said: “The question here is one of jurisdiction. Where an employee’s (or worker’s) contract is deemed to be governed by the laws of England and Wales, their employer must comply with applicable legislation.
“This would include the new Employment (Allocation of Tips) Act 2023 or the 'Tipping Act', which came into force on 1 October 2024, and makes it mandatory for all tips, gratuities, and service charges to be fairly passed on to workers, without deductions (except in very limited situations).”
This legislation applied to workers in the UK, “regardless of where their employer has its headquarters or was incorporated,” Hannah Capstick, employment solicitor at Howard Kennedy, told HR magazine.
While Temper Works provided self-employed contractors, a tribunal would likely rule that their working arrangement fell under the tipping legislation, explained Matt Jenkin, employment partner at Herrington Carmichael law.
Speaking to HR magazine, he said: “Temper Works’ solution appears to be supplying self-employed contractors rather than agency workers.
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“However, I would expect that if that was challenged before an employment tribunal, the tribunal may take some persuasion that, for example, a waitress supplied under this model was genuinely self-employed and not covered by the new tipping legislation.”
In organisations with employees and workers in the UK, HR should review its tipping practices, Capstick recommended.
She added: “HR teams can help to ensure their businesses comply by reviewing current tipping practices, putting a compliant written policy in place and ensuring that, if the tips are distributed by the business rather than an independent 'troncmaster' – the person who is responsible for the distribution of tips – the responsible staff have been trained on the legal requirements.”
