In October, HM Revenue & Customs (HMRC) announced that "amounts paid by the employer to the worker which represent tips, gratuities, service charges or cover charges paid by customers do not count towards national minimum wage pay." This came into effect at the beginning of that month, with the "rise" in the National Minimum Wage, and followed a campaign by Unite the Union. According to their press release, they were "pleased to welcome the launch of the ‘Code of Best Practice’ on service charges, tips, gratuities and cover charges" as it would "bring transparency to the hospitality sector."
At the time, I wrote that "the victory is partial at best." It now appears that even this assesment was optimistic, with today's Independent announcing that "hospitality employers are still abusing the tips system despite Government moves to stop them being counted as part of workers' wages." According to Unite officer Dave Turnbull, "this endeavour to bring transparency to the hospitality sector has resulted in many employers implementing methods to take a larger proportion of money left for staff." Such methods include "hourly rates of pay being cut as a direct consequence of the minimum wage regulations being amended, pools for tips being widened to reduce the amount going to each individual, administration fees being raised, management increasing the proportions they take and staff having to pay the price for breakages, customer walkouts and till shortages."
Unite is "frustrated and disappointed" by this development, but to many it comes as little surprise. In pursuing the campaign, Unite and its supporters have focused very specifically on closing the minimum wage loophole. This was, of course, a vital measure of protection for workers scraping by on base-level wages. However, beyond the basic fact that tips don't count towards the minimum wage, the law specifies nothing else on this subject. And Unite's "Code of Best Practice" is an entirely voluntary endeavour. As such, the door was always open to further abuses of the tips system and of the money on which hospitality workers rely for their living.
The union is appealing to Business Secretary Lord Mandleson to "meet with representatives who work in the hospitality sector in order to hear directly from them what their experiences are and to discuss the type of action which is needed to protect many thousands of vulnerable hospitality staff across the country." The end result, they hope, will be "a clear up of the tips system in the hospitality sector once and for all."
The results of this action will be minimal, if any. Aside from the fact that Mandleson is firmly in the camp of big business and the "free" market, such a "clear up" will still result in no legal obligations whatsoever. A far more effective remedy for the issues being faced by hospitality workers will be greater organisation. Workers in this sector face a wide variety of issues on which effective organisation and direct action could force through effective change. For example, fast food chain McDonalds "is notorious for its obsessive, determined and frequently illegal attempts at obstructing trade union activity within its workforce." Similar criticisms apply to other American chains. Pubs and restaurants can also be deliberately obstructive to workers' rights, particularly with regard to the working time directive viewing it as inconvenient "red tape."
As such, an entirely voluntary "Code of Best Practice" and a "clear up of the tips system" will do nothing to help workers in a sector which is made up largely of young and casual workers often unaware of their rights. Or of the limitations on those rights and the need to fight back against them. (As an aside, it should be noted that the first act of the anarchist revolutionaries in Spain in 1936 "was to abolish the tip as being incompatible with the dignity of those who receive it, and to attempt to give one is the only act, short of making the Fascist salute, that a foreigner can be disliked for.")
Returning to McDonalds as perhaps the most extreme example of this practice, McDonalds Workers' Resistance lays out the hurdles faced by the casualisation (or "McDonaldization") of labour;
The senior trade union bureaucrats have no interest in challenging capitalism- they owe their wealth and power to the status quo- while the union institution itself requires the continuation of the wage system for its preservation.What we need, then, is not a reform of the tips system but a radicalisation of the workers. Though fighting for reforms such as this in order to improve the conditions in the here and now is of course important, it should not in any way be presented as a final goal. When Unite declare that an employer being party to the fair tips charter means that they are "treating their staff fairly," it is a betrayal of the very idea of workers' organisation.
Where workers are already organised in trade unions there may be a case for trying to radicalise the union, and certainly for workers to use the structures of the union to advance the class struggle. However, this is very different from proposing that new workers organisations should stick to the deficient format of the traditional trade union- a format that has proved unable to challenge capitalism and largely unable, or unwilling, to operate in McDonaldized workplaces. The traditional trade union movement has had several decades now to respond to casualisation- today only one in five casual workers and 6% of all workers under 20 are in a trade union. Every other trade unionist is a professional and over a third have a degree. A middle aged manager with a mortgage and a private pension is more likely to be in a union than workers like us. We’re certainly not against unions (or middle aged people with mortgages and private pensions!), we just recognise that we need something more.
It is exceedingly difficult to unionise a McDonalds restaurant (in some situations it is completely impossible where a successful vote will just lead to the branch being shut down), partly because of McDonalds extreme hostility towards unions, but largely because of the exceptionally high turnover. Our first attempt at organisation was an attempt to unionise. We collected signatures from 70% of crew members at our store but so great was the turnover that five weeks later we had signatures from only a minority of employees. Some of the new employees we hadn’t even met. In these conditions we think the loose non-membership approach of MWR is more effective.
There is some cause for optimism. The McDonaldization of employment may have proved a crisis for the labour movement and for workers, but for workers it may yet prove an opportunity- an opportunity to develop new, more effective, more radical organisations, organisations capable of transforming society.
That "this endeavour to bring transparency to the hospitality sector has resulted in many employers implementing methods to take a larger proportion of the monies left for staff" should offer a lesson. Reform can only get us so far and capitalism will do its utmost to weasel out of "fairness." To be succesful, workers' organisation needs to take on a radical character. As Mikhail Bakunin said, over a century ago, "those who have cautiously done no more than they believed possible have never taken a single step forward."