Frequently Asked Questions

“Does it matter whether tips are paid by card, cash or app?”

For the purposes of being ‘qualifying tips’ under the act and subject to the rules, the Draft Code states that the deciding factor is not the method used to leave the tip (Cash, Card, App, QR Code, etc) but whether the tip flows directly to the worker without being in the employers ownership and control at any stage.  Where it does not the tips may be cash equivalent tipping, subject to HMRC rules on how these systems must operate – see HMRC guidance note E24 for more information.

“How long must we keep records, and how fast must we respond to a request?” 

Records must be kept for a minimum of three years (currently back to Oct 2024).  The time to respond to a request from a worker about tips earned is a maximum of four weeks. 

“Can a records request be refused on data protection grounds?”

No, a request for records from an employee cannot be refused on data protection grounds. An employee has the right to request as a minimum the qualifying tips collected at their place of business in the relevant period and the share(s) apportioned to them. They do not have a right to inspect any other employee’s data, however employees do have rights to view the tipping policy (as it was at the time, if it has changed since) and to understand how their share was calculated.

“If our staff all agree our scheme is fair, are we safe?”

Possibly, as long as all the other rules are followed, that the processes used were not coercive, and the agreement was achieved without undue pressure. 

Staff agreement cannot overrule the legal requirements of the act – for example even with staff agreement the employer delaying payment beyond the end of the month following the month of collection, withholding some tips or making deductions would not be allowed. Similarly, an agreement reached through negotiating salaries as part of determining tip distributions would not be considered valid.  Staff agreement alone will also not meet HMRCs requirement for an independent troncmaster to make the final decisions, independently of the employer, in order to qualify for the NIC exemption on distributions of tips.

Even where there is full agreement, it is still important to document that the required consultations have taken place with suitable documentation,

that suitable information was supplied in advance, that outcomes were reported back to the team, and that the troncmaster made the final decision on distribution.

It can also be important to document what steps were taken to ensure no groups were excluded or discriminated against,that the policy proposed was fair, transparent and available.  With this in place, and a reasonable record of the anonymised results of the consultation, then a scheme should be viewed as safe.

Whilst this might sound like a lot, the Code does emphasise proportionality to the size and complexity of a business.  A smaller business may meet all the above needs by GMs completing simple “all hands” team meetings at site level, explaining the scheme, asking questions, writing down the answers and making them available afterwards to the team, and to the troncmaster to inform their decision. A larger business may elect for a more formal process.

“Who is accountable for making sure an agency worker knows they are included in the tronc and how that tronc works?”

  The employer (hiring business) is accountable for making sure that agency workers know they are included in the tronc and how the tronc works. Good practice would be to supply agencies you work with, your policy in advance to ensure any last-minute agency workers arranged are not missed.  

“Who is accountable for making sure the tronc allocation is paid to the agency worker?”

Once the employer has sent the payment to the agency it becomes the agencies responsibility to make sure the agency work is paid their tronc without any additional deductions except tax.  

“Does the Draft Revised Code of Practice make any changes to when tips should be distributed?”

No there is no change to when tips must be distributed. It remains by the end of the following month the tip was collected in, if a tip was collected on the 1st of June it must be paid at the very latest by the end of July.  

“When should we review our Tronc Policy?”

Tronc policy should be reviewed at an absolute minimum once every three years. However,  team turnover should be taken into account. If more than 50% of the workers who were the “broad majority” in the current policy have moved on then you should review the policy. Consultation will also be required for any changes to the policy so it would be prudent to consider scheduling more regular reviews. 

“Why would a vote on our tronc policy that most employees like not be enough to satisfy the requirement for consultation?”

The issue is around the makeup of the majority. If a business has thirty workers with twenty working FOH and ten working BOH, the FOH could all vote for a policy that gave them ten points for every hour they worked and BOH 1 point for every hour they worked, meaning FOH staff receive 10 time the tips of BOH for the same working time.  If all FOH workers voted for this policy, with BOH voting against, whilst it was supported by a majority of workers overall, it would not be a “broad” majority, as it is only from one group of workers.  This would likely not be seen as meeting the requirement, and may not be seen as fair were it challenged at tribunal.

“Does the Code ban fixed troncs?”

The code lays out clear concerns and guidance on why allocations of fixed or guaranteed amounts to specific individuals, or a category of individuals, “may” be viewed as unfair. This is because it concentrates the natural variability of tronc on those not participating in fixed awards.  In practice, this is often the lowest paid workers overall.  Whilst the Code uses the word “may” and encouraging “caution”, given that tribunal judges are obligated to refer to the code, this creates a burden of proof on employers or troncmasters wishing to implement fixed tronc.  The clear intention is that there must be exceptional circumstances to justify this approach as fair.
 

“In relation to consultation what would an employer need to give to employees before the consultation takes place?”

An employer would need to give all employees a breakdown of the proposal of how the tronc will be collected and how it will work. As an example,

“Tronc funds will be collected via card payments and will be a mixture of discretionary service charge and optional tips.

These will be pooled each day and split on a daily basis on the basis of hours worked on that day, with hours receiving a weighting based on points allocated to each role, in accordance with the attached schedule.  

Points for each role are set by our troncmaster based on recommendations from our tronc committee, and benchmarking against industry standards.”

This must clear sent with enough time for workers to be able to understand what they are being expected to consult on. 

“What would be seen as reasonable record of the consultation?”

The consultation record should be an accurate record of what took place, and could be a short written report or paper that is kept on file.

This should include:

1. 1. The detail of what was circulated in advance, which roles took part and what the responses were.
   2. It should demonstrate that a breadth of different roles were included in the consultation.
   3. The “main themes” of the consultation responses should be documented ensuring both sides of any discussions are represented.
   4. It should include the outcome reached and why, noting any disagreements.

The code also suggests the responses can be anonymised, so you do not have to specify which team members raised which points, or who made any particular comment.