Business secretary calls for evidence following reports of unethical behaviour
Business secretary Sajid Javid has called for an investigation into restaurant tipping policies, after reports that employers have been withholding money from staff.
Most recently, Las Iguanas was criticised for its scheme, under which waiting staff have had to pay back 3 per cent of the total payments from customers they serve per shift – rising to 5.5 per cent for London branches.
Meanwhile, trade union Unite has organised protests against Pizza Express for its policy of deducting 8 per cent of tips paid by card. The Italian eatery said that the deductions are to cover the costs of running its ‘tronc’ system, where tips are pooled together and shared between the staff. Giraffe has recently scrapped a similar 10 per cent deduction from tips for admin costs.
Javid has launched a formal investigation, which is due to end on 10 November. This will examine how gratuities are being treated and will seek opinions on whether the proportion of tips restaurants can withhold should be capped and, if so, at what level.
In 2009, the government issued a voluntary code of practice, which advises businesses to detail their gratuities procedure in writing, including details of how tips are distributed and what deductions are made. The investigation will consider whether the code needs strengthening.
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. As a one nation government we want a fair deal on pay for working people and that includes taking action on tipping abuse.”
However, Unite warned that introducing legislation that restricted the amount that could be deducted from tips might condone the practice.
Dave Turnbull, Unite officer for the hospitality sector, said: “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 also warned that it would be difficult to ensure that employers complied with any new recommendations. He said: “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.
“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.”