The National Minimum Wage (Protection of Employee Tips) Bill 2017 came before the Seanad on Wednesday 24 January 2018 for second stage debate.
If passed into law, the Bill would amend the National Minimum Wage Act and change the existing scope for employers to withhold, deduct or demand the return of a tip or other gratuities from an employee.
In addition, the Bill makes it an offence to contravene the above prohibition without a lawful basis for doing so.
For the avoidance of doubt, Ibec's concern about the Bill aimed at ensuring that employees receive the tips to which they are entitled relates to the proposed inclusion of tips and gratuities as wages and the tax implications of same.
An amount taken, in this context, is considered to be a debt owing to the employee and is treated as wages owed to that employee. Employees can take a claim to the Workplace Relations Commission ("WRC") seeking an award of redress where an employer has failed to comply with these provisions.
If an employer is found guilty of an offence, the employer could be liable to a fine of up to €2,500 and/or imprisonment of a term not exceeding 6 months, if the Bill is passed.
There is also a provision in the proposed legislation which places an obligation on employers to display on menus, or in a similarly prominent manner, its policy on the distribution of tips to employees.
Ibec has a number of other concerns about the Bill. One such concern is that the Bill reflects a recent pattern of over reliance on criminal prosecutions to address disputes in the employment relationship. It proposes that a breach be treated as a criminal offence, attracting a fine of €2,500 or imprisonment of up to 6 months. Furthermore, Ibec believes it is inappropriate that personal liability should attach to the breach of the provisions contained in the Bill. Terms of imprisonment and personal liability for non-compliances by corporate entities should be reserved for only the most serious offences, given the significant interference with an individual’s personal liberties that imprisonment imposes. Such serious criminal sanctions should certainly not apply to every minor breach or contravention of employment law.
Ibec also notes that the Bill does not contain an de minimus consideration nor does it contain any distinction between serious or minor breaches of its provisions. It would therefore, appear possible that an individual could be imprisoned for a failure to pass on a tip to an employee, regardless of the value of the tip or the level of loss to the employee. This is entirely disproportionate and unwarranted.
Of further concern to Ibec is that despite the severity of sanctions proposed, much of the language contained in the Bill is far too vague to meet the requirements of legal certainty; a core principle of legal drafting.
The Bill, which will face several more stages before it can become law, is available here.