The government has published its response to a public consultation on the rules governing the allocation of tips, alongside an updated draft Code of Practice reflecting the additional employer obligations introduced by the Employment Rights Act 2025.
Section 14 ERA 2025 requires employers to:
- consult trade union or elected employee representatives (or, where none exist, employees directly) when developing a tipping policy;
- consult again whenever the policy is reviewed (at least every three years); and
- provide all workers at the place of business with an anonymised summary of the consultation.
The draft Code explains that:
- consultation should be genuine, proportionate, inclusive and transparent;
- employers need not accept every suggestion made by workers;
- employers should aim for broad agreement that tip allocation is fair, reasonable and clear, with genuine, uncoerced staff support;
- consultation may include meetings, group discussions and surveys, depending on the size and nature of the business;
- employers should consider all views, including those of minority groups, and regularly review tip allocation to ensure it remains fair and non-discriminatory;
- worker support for a distribution method may help a tribunal conclude it is fair and reasonable; and
- employers should keep a written record of the consultation, including the process, views expressed and outcomes.