UK ministers are shelving plans to ensure that workers keep their tips, despite having first promised to do six years ago, in a move that has angered trade unions.

Paul Scully, the business minister, announced in September that the government would take action to make it illegal for employers to withhold tips from workers. The plan was designed to prevent restaurants from the increasingly common practice of taking a share of tips rather than passing them on to staff.

The idea had been on the back burner since it was first put forward by Sajid Javid when he was business secretary in 2016. But government insiders say that the idea has been dropped from the Queen’s Speech on May 10.

Sharon Graham, general secretary of Unite, the union, said hospitality workers can lose thousands of pounds a year from their earnings when an employer refused to hand over their tips.

“Every year this government promises action to ensure fair tipping, and then does precisely nothing to deliver on that promise,” she said.

Some restaurant chains treat their employees fairly and split the tips given to waiting staff in order to share them with supervisors and kitchen staff. But unions say that increasing numbers of businesses add a discretionary service charge on to customers’ bills and keeping all or part of the service charges, without passing them on to staff.

Scully announced in September that his plan would help about 2mn UK workers retain their tips: “Customers will know tips are going to the worker for a fair day’s work,” he said.

At the time the government said it was taking action because the shift towards a cashless society — with 80 per cent of tipping now taking place on cards — had led to more “dodgy tipping practices”.

The legislation would have included a requirement for all employers to pass on tips to workers without any deductions. It would also have laid out a statutory code of practice setting out how tips should be distributed to ensure fairness and transparency.

However, the plan has been dropped “for the foreseeable future”, according to one senior government figure. Ministers had hoped to squeeze it into a proposed employment bill but that legislation has been shelved.

Other policies in the proposed bill would have included more predictable contracts, protection for pregnant employees, a single agency to enforce worker rights and making flexible working a default option for workers.

On Wednesday the business department, BEIS, said it could not pre-empt the contents of next week’s Queen’s Speech. However it did not deny that the plan had been dropped.

Frances O’Grady, general secretary of the Trades Union Congress, said ministers had no excuse for breaking their pledge to enhance workers’ rights.

“If the government fails to bring forward an employment bill at next week’s Queen’s Speech it will betray some of the lowest paid and most vulnerable workers in Britain,” she said. “They will have conned working people.”

BEIS suggested that the government would encourage that “industry best practice” on tipping should be applied by employers.

“Workers should absolutely get the tips they deserve, and customers should have reassurance that their money is rewarding staff for their hard work and good service,” said a BEIS spokesperson. They added that under existing legislation, tips cannot count towards minimum wage pay.