UK employers left wondering after tipping code of practice withdrawn

Industry bodies have expressed concern about the surprise move, with UKHospitality calling for “urgent” clarification on the government's intentions. It said that the withdrawal leaves employers uncertain about what will be required from 1 October 2026, when the changes are due to come into force.

• Read more: what your business needs to know about implementing the Employment Rights Act

The draft revised code of practice on tipping was intended to replace the 2024 version, reflecting changes introduced by the Employment Rights Act 2025. It required employers to demonstrate meaningful consultation and greater transparency around how tipping decisions are made, with employer-worker consultation taking place through recognised trade union or worker representatives where they exist, or directly with workers where they do not.

The withdrawal follows criticism from Unite, which described the draft code as "flawed" and called for it to be withdrawn. The union argued that the revised framework fell short of previous commitments to give workers greater control over tip allocation, as it would require employers to consult workers but ultimately leave allocation decisions in management's hands.

Joe McMorrow, employment law expert at Pinsent Masons, said: “The biggest change in the revised code was the shift from simply having a fair tipping policy to actively involving workers in shaping it. The code will supplement consultation provisions set out in the Employment Rights Act 2025, but they are not yet in force. However, where we go from here is presently unclear.”

Nicola Welsh, specialist in employment law at Pinsent Masons, said: “The original code focused on ensuring tips reached workers fairly. This revised version went further by giving workers a stronger voice in the process, increasing scrutiny of tipping arrangements and making it harder for businesses to operate opaque allocation systems. Certainty for employers, particularly across the hospitality and sports sectors, is essential.”

When finalised, employment tribunals will be required to take the code into account when considering disputes relating to tipping practices. However, failure to follow the code will not automatically establish legal liability.