Staff Face Sack For Being Honest About Service Charges

Asking for tips in cash could cost Strada's waiting staff their jobs

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Although it will become a matter of law later this year, the practice of using tips to top up staff pay is still prevalent in a number of chain restaurants.

An article published in last weekend’s Observer revealed how staff working at branches of Strada, Café Rouge and Bella Italia are forbidden to tell diners that the optional service charge is used to subsidise the national minimum wage paid to waiters.

According to the article, Tragus, the company who operates the three restaurants, sent a memo last month to all branch managers telling them to crack down on staff who appeared to be encouraging customers to leave cash instead of putting the service charge on their card. Cash tips go directly to staff, but those paid by card go to the company

The memo, received on 22 May, told them to check the percentage of service charge collected by individual waiters each week. "If you find certain employees have low service charge, you must organise a meeting with the employee to discuss the reports. This may indicate they are fraudulently having the service removed when it was actually paid for by the customer," the memo stated.

The Strada restaurant manager who showed the Observer the memo claims that, of the £6.50 hourly rate that waiters receive, only £2.50 comes from the company, with the rest paid out of tips left by customers. He says that when staff join Strada they are told not to tell customers about this arrangement and that any who do risk severe consequences. "If I see a waiter telling the customer about what happens to the tips and encouraging them to leave a cash tip instead, I remind them that this is not what they were trained to say. If a waiter consistently tells customers what happens to the service charge they would be disciplined and eventually sacked."

Using tips left by customers to make up workers' pay to minimum wage levels is to be outlawed from October. Following a lengthy campaign by unions against restaurant chains including Carluccio's, Café Rouge, Strada and Caffé Uno, the practice of 'funneling tips into paying basic wages’ will now be against the law.

In addition other chains such as Zizzi and ASK who failed to pass on gratuities on credit and debit cards as rewards will also have to alter their policies. Under the current law, restaurateurs are legally entitled to do more or less whatever they wish with tips. Service may or may not be included in the bill, typically with a "discretionary" 10 per cent or 12.5 per cent service charge.

Employment Relations Minister Pat McFadden said, "When people leave a tip for staff, in a restaurant or anywhere else, they have a right to know that it will not be used to make up the minimum wage. It is also important for employers to have a level playing field on wages. This is a basic issue of fairness. We do not believe employers should be able to use tips meant as a bonus for staff to boost pay levels to the legal minimum."

The campaign for fair tipping won the backing of leading chefs, including Marco Pierre White and Gordon Ramsey as well as politicians and a number of restaurant guides. Co-owner of Frankie’s Bar & Grill Marco Pierre White said, "Staff work very hard and I think all tips should go to them."

June 9, 2009