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UK Restaurants To Be Banned From Keeping Staff Tips

UK restaurants to be banned from keeping staff tips

Restaurant owners will be banned from taking customer tips and service charge payments from workers under legislation being introduced by the government five years after a ban was first proposed.

The law, which is designed to help about 2 million waiting staff and other hospitality workers, follows a series of high-profile stories about companies deducting money from card payments intended for waiting and kitchen staff.

The government said research had shown many businesses that add a discretionary service charge to customer’s bills were keeping part or all of that cash, instead of passing it to staff.

Some businesses have used the cash to top up managers’ or chefs’ wages and others have used it to support profits.

A change in the rules has become urgent after the pandemic spurred a switch to cashless payment with 80% of all UK tipping now happening by card, making it easier for businesses to keep funds. Cash tips are already protected by law.

Paul Scully, the labour markets minister, said: “Unfortunately, some companies choose to withhold cash from hardworking staff who have been tipped by customers as a reward for good service.

“Our plans will make this illegal and ensure tips will go to those who worked for it. This will provide a boost to workers in pubs, cafes and restaurants across the country, while reassuring customers their money is going to those who deserve it.”

Under the law, it will be illegal for employers to divert tips and service charges from restaurant workers. Those breaking the rules can be fined and forced to compensate workers. However, any legal action will be reliant on workers bringing an employment tribunal case.

A statutory code of practice to be developed after further consultation with businesses, workers and other stakeholders will set out how tips should be distributed to ensure fairness and transparency. Workers will also have a new right to make a request for information relating to an employer’s tipping record, enabling them to bring an employment tribunal claim.

The Unite union, which has led a long-running campaign for legislation on tips, said the five-year delay had cost waiting staff an estimated £10,000 each in lost tips.

Sharon Graham, Unite’s general secretary, said: “It’s shocking that this group of mainly young workers has had to wait five years for government action to tackle the tips scandal.”

The union warned that the new code must not leave workers open to abuse through unfair distribution systems.

Kate Nicholls, the chief executive of industry body UKHospitality, urged the government to work closely with businesses and employees to make the system work for all as she said venues faced mounting costs.

“For hospitality businesses, though, customers tipping with a card incurs bank charges for the business, and many also employ external partners to ensure tips are fairly distributed among staff,” she said.

The government pledged to take action to protect workers’ tips and service charges in 2016 after a string of revelations about businesses taking a slice of the payments. It committed to legislation in 2018 after a lengthy consultation. The law is now set to be put before parliament as part of a wider employment bill, although there is still no firm timetable.

Concern about tipping practices began in 2015 when the Observer revealed that Pizza Express was taking 8p of every £1 paid when tips were given by card. It later emerged that chains including Giraffe were also taking a cut of tips. Although Pizza Express, Giraffe and many other chains dropped the policy after a public outcry, unsavoury tipping practices have continued to emerge.

Most recently, the Guardian revealed that Pizza Express waiting staff were losing a slice of tips in order to bump up pay for kitchen workers. Waiting staff at the burger chain Byron, meanwhile, fear their tips are about to be diverted to increase pay for kitchen workers and restaurant managers.

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NERC approves N21b for purchase of meters

Govt directs electricity companies to charge Nigerians per hour

The Nigerian Electricity Regulatory Commission (NERC) has announced the approval of N21 billion for 11 electricity Distribution Companies (DisCos) to provide meters for customers.

This announcement was made in NERC’s ORDER NO: NERC/2024/072 on The Operationalisation of “Tranche A” of the Presidential Metering Initiative Under the Framework of Meter Acquisition Fund.

”The order signed by NERC Chairman, Mr Sanusi Garba and Commissioner Legal,  Dafe Akpeneye, shall become effective from June 2024 and may be amended or revoked by subsequent orders issued by the commission.

“The commission hereby approves the  sum of N21 billion apportioned pro rata to contribution by the DisCos as Tranche A of the MAF scheme.

”Attached to this order as Schedule 1 is a breakdown of the funds available for each DisCo for the purchase of end-use customer meters.

”All the meters to be procured and installed under the MAF framework shall be at no cost to the customers of the DisCos,” it said.

According to NERC, it introduced the Meter Asset Provider (“MAP”) Regulations 2018 and subsequently, the Meter Asset Provider and National Mass Metering (“MAP&NMMR”) Regulations in 2021 to address metering challenges in the Nigerian Electricity Supply Industry (“NESI“).

NERC said that the regulations provided several options for metering end-use customers but the interventions, though significant, had not resulted in the closure of the national metering gap which currently stood in excess of seven million customers.

”The inability of distribution companies (DisCos) to raise financing in the form of debt or additional equity was identified as the major constraint in the acquisition and deployment of end-use meters and other capital investments.

”The Meter Acquisition Fund (MAF) scheme was therefore, developed and approved by the commission, primarily to address the challenges of DisCos creditworthiness inhibiting the deployment of end-use meter in NESI.

”By creating a credible revenue stream from the market funds on the back of which long term financing may be secured by the utilities,” it said.

NERC said that the management of Fund Manager (FM) based on terms and conditions, negotiated by the DisCos and approved by the commission.

According to the commission, the federal government approved the Presidential Metering Initiative (PMI) with the overarching objective of closing the metering gap in the NESI within three years leveraging on smart metering technologies for data analytics.

The MAF shall form one of the revenue streams for the repayment of the long tenor financing for metering.

The order also revealed that the commission approved the deregulation of meter prices under the MAP scheme vide Order NERC/2024/040 to ensure an efficient pricing of meters while responding more quickly to changes in macroeconomic parameters.

“The order provides that all prices of meters under the MAP scheme shall be determined through a transparent and competitive bidding process by eligible MAPs.

“A competitive bidding process was held on  May 21, 2024 based on the provisions of Order NERC/2024/040 where a total of 24 ( MAPs participated across the 12 DisCos.

”A total of 44 bids were submitted for 10meters specifications,” it said.

NERC said the deployment of funds under the MAF scheme would accelerate the deployment of meters and a closure of the current metering gap.

”Thereby reducing commercial and collection losses to DisCos, enhancing quality of service and improvement of customer satisfaction,” it said.

NERC also noted that while the NESI is expected to leverage on the revenue stream under the MAF framework to raise substantial capital funding for metering, there was an imperative to accelerate a closure of the metering gap for all customers.

”Currently classified under tariff Band A for the purpose of revenue protection and facilitating demand side management for the affected customers.”

NERC said that the DisCos should utilise the first tranche (Tranche A) of disbursement from the MAF scheme based on contributions made by DisCos as at the April 2024 markets settlement.

It said that attached to this order as Schedule 1 was to procure and install meters for unmetered Band ‘A’ customers within their franchise areas.

The commission said DisCos shall, within 14  days from the effective date of the order, conduct a transparent and competitive procurement process, for meter price determination, selection and engagement of MAPs/LMMAs for the metering of end-use customer meters under the MAF scheme.

”The order also directed that a report containing details of the process undertaken for the selection of MAPs/LMMAs including meter price, meter specifications.

”And the list of customers to be metered shall be sent to the commission for approval, within 20 days from the effective date of this Order.

” Upon approval of the commission, the DisCo shall enter into contracts with selected MAPs/LMMAs on one of the following terms,”it said.

The commission said that where an Advance Payment Guarantee (APG) issued by a commercial bank in the country is provided by a qualifying MAP/LMMA, 30 per cent of the contract sum shall be paid by the FM on behalf of the DisCo to the MAP/LMMA.

” Upon execution of the contract. A further two milestone payments shall be made upon the completion of 60 per cent of contracted quantities and 100 per cent of the contract respectively, with the funds advanced against bank guarantee amortized over the payments.

“Where the MAP/LMMA do not request an advance payment, the milestone payments shall be made upon the verified installation of 20, 60 and 100 per cent respectively of the contracted volume of meters.

”A vendor may, at his option, defer payment until the completion of the installation of the contracted volumes.

“DisCos shall ensure that all the necessary resources and network clearance required by the MAP/LMMA to install meters based on installation plans are provided and/or completed,” it said.

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Nigeria’s public debt now N121trn – Debt Management Office

exchange rate

The Debt Management Office (DMO) says Nigeria’s total public debt has reached N121.67 trillion within three months.

The Cable reports that this figure represents an increase of N24.33 trillion or 24.99 percent from the N97.34 trillion as of December 2023.

Nigeria’s public debt profile consists of the federal and subnational governments’ domestic and external debt stocks — the 36 states and the federal capital territory (FCT).

According to the DMO, the increase was primarily due to new domestic borrowing by the federal government to partly fund the deficit in the 2024 budget as well as disbursements by multilateral and bilateral lenders.

“Total domestic debt was N65.65 trillion (USD46.29 billion) while total external debt was N56.02 trillion (USD42.12 billion). Excluding naira exchange rate movements in Q1 2024, only the domestic debt component of total public debt grew from N59.12 trillion on December 31, 2023, to N65.65 trillion on March 31, 2024.

“The increase was from new borrowing to part-finance the 2024 Budget deficit and securitization of a portion of the N7.3 trillion Ways and Means Advances at the Central Bank of Nigeria.

“Whilst borrowing, as provided in the 2024 Appropriation Act, will continue, we expect improvements in the government’s revenue to enhance debt sustainability.”

On June 13, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced the approval of two major “financial support packages” by the World Bank — valued at $2.25 billion. In May, the Bureau of Public Enterprises (BPE) said the federal government has secured a $500m World Bank loan to boost electricity distribution in the country.

Prior to this, the federal government had received $750 million from the World Bank for humanitarian and social reforms and $1.5 billion for its economic stabilisation plan.

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Fuel price increases by 223% annually – NBS

The National Bureau of Statistics says the price of Premium Motor Spirit, known as petrol, increased by 223.21 percent to N799.62 per litre in May 2024 from N238.11 same Month last year.

NBS disclosed this recently in its Price Watch for May.

The report noted that Petrol prices increased 9.75 percent to N769.62 per litre in May 2024 compared to N701.24 in April.

On a state profile analysis, Jigawa State had the highest average retail price for Premium Motor Spirit (Petrol), at N937.50, Ondo and Benue States were next, with N882.67 and N882.22, respectively.

Conversely, Lagos, Niger and Kwara States had the lowest average retail prices for Premium Motor Spirit (Petrol), at N636.80, N642.16 and N645.15 respectively.

On the zonal level analysis, the North-West Zone had the highest average retail price of N845.26, while the North Central Zone had the lowest price of N695.04.

The development comes as the Nigerian government under the leadership of President Bola Ahmed Tinubu on May 29, 2023, announced fuel subsidy removal which saw the price of the product jump to N600 per litre from around N238 per litre.

Fuel price hikes resulted in the ripple effect of rising inflation in Nigeria. This is as headline and food inflation increased to 33.95 percent and 40.66 percent respectively.

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