OLRB confirms employers set terms of tip redistribution
When it comes to employee tips, a recent ruling out of Ontario makes one thing clear: Employers have broad legal discretion over who gets into the tip pool.
The case involved a new hire at an Ontario café who worked from June 6, 2024 to July 15, 2024.
During training shifts with coworkers, tips went to the supervising employee rather than to the new hire, except when owner Helena Kosikova trained her directly. The employer's rationale: training is extra work for the supervising employee.
Employment standards on tips
The server argued she was working independently and customers would reasonably have expected her to share in the tips.
The Employment Standards Act defines "tip or other gratuity" as including payments where "a reasonable person would be likely to infer that the customer intended or assumed that the payment would be kept by the employee or shared by the employee with other employees."
She also pointed to the Act's possessive references to "an employee's tips" in sections 14.2 and 14.4, arguing that it further supported the view that the term "some or all of the employer's employees" in section 14.4(1) is ambiguous.
No ambiguity, no claim
In a March 6, 2026 decision, Ontario Labour Relations Board vice-chair Jordan Kirkness dismissed the worker’s claim against Kosikova.
He rejected the ambiguity argument on two grounds. First, the legislature could have added qualifying language requiring inclusion of the employee a customer would expect to tip, but chose not to.
Second, the board distinguished between two terms in section 14.4(1). "Withhold" covers the entirety of an employee's tips, while "deduction" covers only a portion. The board concluded: "the plain language of section 14.4(1) is not ambiguous. It permits an employer to choose which group of employees will be included in the redistribution pool," subject to restrictions and exceptions under sections 14.4(2) through (5).
The director of employment Standards, appearing as a responding party, relied on the governing standard set out in a 2022 Ontario Labour Relations Board decision: "While the Act prescribes strict conditions regarding the withholding of tips, it does not regulate the terms of tip pools, and does not provide for the enforcement of such terms."
Two-thirds (67 per cent) of Canadians say it is time to abolish tipping, according to a new survey.
No entitlement to tips
The Act is not entirely silent on employer obligations. Section 14.4(6) requires that any policy permitting an employer, director, or shareholder to share in redistributed tips must be posted "in at least one conspicuous place in the employer's establishment where it is likely to come to the attention of the employer's employees."
The ruling confirms that employers are not legally required to include any particular employee in a tip pool.
According to the board's interpretation of the Act, “the applicant was not entitled to be included in the tip redistribution pool. Thus, she is not entitled to the amounts she has claimed."
