A gig economy firm has been criticised for telling its hospitality clients they can avoid new fair tipping laws and a forthcoming ban on zero-hours contractors by using its freelance workforce.
Temper Works, which supplies workers to more than 5,000 companies, including Hard Rock Cafe, Alexandra Palace and Claridge’s, is promoting its workforce to restaurants, hotels and bars on the basis that “they are not covered by the provisions of the new [tipping] legislation”.
The Netherlands-based firm, which opened an office in the UK in 2022, warns companies that agency workers “must now be included in tip-sharing schemes” but claims gig economy workers sourced through its website fall outside the legislation. “By engaging freelancers through Temper, businesses can continue to access flexible labour without the added costs and complexities associated with tip allocation for agency workers,” it states in a briefing published last month.
Under the Employment (Allocation of Tips) Act, which came into force last month, firms must share all tips between workers, including temporary agency staff. The legislation was prompted by a public outcry over high street chains deducting money intended for waiting and kitchen staff. The Observer revealed that Pizza Express was taking 8p of every £1 paid when tips were given by card in 2015. The policy was later scrapped by the chain.
The Unite union, which campaigned for the new tipping rules, said it was potentially unlawful to exclude gig workers from tips shares as the courts would probably find they were not genuinely self-employed. “For Temper Works to be so flagrantly advertising services which seek to flout new and well-established employment law to line their own pockets isn’t just morally reprehensible, it is almost certainly illegal,” said Bryan Simpson, Unite lead organiser in the hospitality sector. Temper Works is also advising firms to use its 60,000-strong pool of freelancers to get around a proposal to ban zero-hours contracts, which is a key plank in Labour’s new worker’s rights legislation. Under Labour’s the forthcoming employment rights bill, agency workers on zero-hours contracts will have the right after 12 weeks to a contract with guaranteed hours.
A document by Temper Works from August argues the changes “present significant challenges for businesses that have come to rely on the flexibility offered by zero-hour contracts”. It adds the requirement to offer stable contracts means “overall labour costs are likely to rise”. It says firms should instead “use independent contractors as [a] pool of temporary workers” which “allows businesses to benefit from a flexible workforce that can adapt to changing demands while ensuring that the business isn’t burdened with the obligations and restrictions associated with permanent employment contracts”. Another briefing on Temper’s website claims it can help firms “survive the national minimum wage increase” earlier in the year, which the chancellor announced last week would rise again to £12.21 in April 2025. Temper says shifts can be as long or as short as a business wants: “We frequently see shifts of just 60-90 minutes, to cover the lunchtime rush. You only need to pay for staffing precisely when required, and only for the actual time worked on shift.”
The UK government is planning to consult on bringing in a simpler two-tier employment framework, which distinguishes between genuine self-employment and all other types of workers. A Department for Business and Trade spokesperson said: “Employers shouldn’t try to circumvent the spirit or letter of the law through practices like bogus self-employment or not passing on tips. If they do, workers can take them to a tribunal where they may be made to pay significant compensation.”
Temper Works said it did not recognise the “strong claims” made by Unite. “Temper is a platform that has always operated, and will continue to operate, transparently and according to UK law,” it said in a statement. It said a Dutch court had found it was a platform for work, not an employment agency. It added that the functions built into the platform, including the ability to appoint substitutes to perform work, negotiate hourly rates and turn down work, ensured it was “a marketplace for independent contractors”. Temper said independent contractors sat outside of the tipping legislation but clients were free to “allocate tips to contractors on Temper if they wish to do so”. It added that contractors were given a range of protections,which are not typically offered to agency staff, including a minimum of £12 an hour and compensation for loss of earnings for up to 12 months. It said the average pay on the site was £14.09 an hour in September while shifts of 60-90 minutes were in reality “uncommon”.