The Association of Licensed Multiple Retailers (ALMR) has welcomed the Government's consultation into tipping practices, but urged it to proceed with caution before changing any legislation.
The response comes a day after the Government consultation into tipping practices concluded, ahead of its expected publication of a report into the issue.
In a statement, chief executive Kate Nicholls said that the ALMR's own investigation had found no evidence of wrongdoing, but that consumers, the media, and some staff members clearly misunderstood the law on tips and redistribution of service charges.
The investigation would give the industry a chance to modernise the current code of practice for tipping, she added, and allow the legislation to reflect modern payment practices such as contactless cards.
She said: "The ALMR has carried out a widespread survey of members, including leading casual-dining businesses, and found extensive awareness of the current code and compliance with it. Much of the reporting of tipping practice has been inflammatory, based on anecdotal evidence and unhelpful in its effort to address any perceived problems.
"The consultation presents us with a chance to modernise the code, to better reflect contemporary payment practices such as cashless, and clear up any grey areas."
However, she advised the Government to move carefully when attempting to change any legislation, and to stop any heavy-handed intervention into the affairs of small businesses, which should be afforded a degree of flexibility when it comes to rewarding staff.
She said: "We would urge the Government to proceed cautiously with any legislative changes so as not to add to the confusion. Intrusive regulation of employer practices regarding distribution of tips may well undermine the sector's ability to push growth and inhibit investment. The system is in place to reward staff members who contribute to a great customer experience and wholesale changes may see those employees suffering as a result."
The Government consultation came after Sajid Javid MP, secretary of state for business, innovation and skills, called for an investigation in September in response to earlier allegations that restaurant groups were "abusing" customer tips, and did not make the difference between tips and service charges clear enough.
Casual dining groups Côte, Las Iguanas, Turtle Bay, Pizza Express and Bill's were among those accused of operating a less-than-transparent tipping policy, allegedly spending a high proportion of service charges on administrative costs, and misleading customers into believing the full amount was going to front-of-house staff.
Some restaurants were also allegedly taking cash tips from staff and some were even accused of asking staff not to disclose their tipping policies to customers. However, each of the groups denied any wrongdoing.
Today the Department for Business, Innovation and Skills confirmed that the Government's consultation had finished collecting responses from interested parties, and would be publishing its findings "in due course".
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