A union has rejected plans aimed at capping the amount in tips that a restaurant can deduct from waiting staff.

Unite said it was pleased the government was taking seriously the problems caused for restaurant workers by their employers keeping a proportion of the tips they earn, but the union urged the business secretary, Sajid Javid, not to introduce a system that would make it lawful for an employer to pocket a proportion of staff’s tips.

Capping admin fees will simply legitimise the underhand practice of restaurants taking a slice of staff tips Unite officer Dave Turnbull

Javid has launched an investigation into tipping after leading restaurant chains were accused of keeping all or part of the service charges automatically added to bills rather than passing them on to staff.

Unite officer Dave Turnbull said: “We are pleased that the government has woken up to this scandal, but we would ask that they think carefully about an effective solution. Capping admin fees will simply legitimise the underhand practice of restaurants taking a slice of staff tips and be near enough impossible to enforce.

“When customers eat at the likes of Pizza Express, they give tips in the expectation that all of it will go to staff and not be pocketed by management. Only last week, Giraffe scrapped its 10% admin fee on tips, joining chains like Restaurant Group and Jamie Oliver’s to play fair with their staff.

“Rather than tinkering around the edges, Sajid Javid should be looking to scrap what is effectively a tax by restaurant bosses on money meant for the pockets of hardworking staff. The principle ought to be that the tips go to those who have earned them, plain and simple.”

Turnbull questioned who would police a cap. “The government agencies responsible for regulating the system now are already seriously under-resourced and can’t keep across abuses – they just would not be able to cope with this additional burden,” he said.

“I appeal to the minister to discuss with us on how to make this work as a great deal of thought has already gone into this. The reality is that the problems now before us could have been headed off years ago. Had the government been true to its word in the last parliament and honoured the code agreed with employer and consumer groups, and the unions representing waiting staff, then the issue of who keeps the tips would have been addressed.

“The minister needs to understand that the only way forward is the most just way – let the workers keep their tips.”

The inquiry will look at how restaurants treat tips left by customers and whether intervention is necessary to strengthen the voluntary code of practice run by the industry.

Javid said: “When a diner leaves a tip, they rightly expect it to go to staff. In full. I’m concerned about recent reports, suggesting some restaurants pocket tips for themselves. That’s just not right.

“I’ve ordered an immediate investigation to look at the evidence and consider the views of employees, customers and the industry to see how we can deal with the abuse of tipping. We want a fair deal on pay for working people and that includes taking action on tipping abuse.”