Tipping point

Unite official Dave Turnbull is meeting with senior civil servants this Thursday to give them “chapter and verse” about how the restaurant industry is undermining the national living wage.

It is common practice in the UK for restaurant customers to leave a gratuity for the staff member who provided them service. But some diners are in the dark as to where their hard-earned cash is being diverted. Recently, popular eateries such as TGI Fridays have found themselves in hot water over tipping practices at their restaurants, resulting in workers across the country striking.

In May Unite members at TGI Fridays restaurants at the Trafford Centre, Milton Keynes, London’s Piccadilly Circus and Covent Garden staged three walkouts in their dispute over tips and alleged minimum wage breaches.

They said the company’s decision to redirect 40 per cent of waiters’ tips to the kitchen teams instead of a pay rise could cost them £250 a month in lost wages.

“People have said to me that they’ve been pushed so far down now that they’ve got nothing left to lose,” says Turnbull, regional officer for the union. “They don’t have mortgages, they don’t own their own house, they can’t afford to go on holiday, so why not go on strike and fight for what they think is right?”

“It’s like a commission in reverse. The more you sell, the more you pay back to the company.”

One particularly unsettling move by certain restaurants has been dubbed table tax. This enables the server to keep all of their tips but they will be charged a percentage of their sales at the end of their shift. Restaurants that have been implicated in this practice include Aqua Italia in Bristol, which were charging staff a 3 per cent levy at the end of each shift. Restaurants such as Las Iguanas and Turtle Bay have since dropped this policy due to a public backlash.

“It is a complete scam. The sales always exceed the amount of tips,” explains Turnbull. This “tax” then gets redirected to back-of-house staff or even back to the employers. “It’s like a commission in reverse. The more you sell, the more you pay back to the company.”

Some argue that this redistribution of wealth enables back-of-house staff to receive tips that they wouldn’t normally get, as they are not directly involved with the customer. Others disagree, saying that this method is simply a way of restaurants avoiding wage increases for low paid back-of-house workers.

Turnbull is also concerned about the treatment of some waiting staff who are being charged for customers who “dine and dash”, leaving the restaurant before they have paid. “You can’t imagine that happening in a supermarket if there’s a shoplifter – the cashier having to be taken to a cashpoint to pay back Sainsbury’s. It just wouldn’t happen.”

Last year, Unite worked with the Association of Licensed Multiple Retailers to produce a voluntary code of practice for good tipping. Principles include workers electing someone to manage pooling and distribution of tips without direct company involvement, no hidden or admin charges by employers and a provision for dispute resolution. Turnbull has also backed Labour’s pledge to legislate to ensure workers can keep 100 per cent of the tips they are given.

Some have called for the scrapping of tips altogether, to force employers to pay better. “I can’t see it happening,” says Turnbull. “But I think the legislation and codes of practice for tips could be tightened up and certainly the voluntary code of practice should become statuary code, because at the moment it’s just a piece of paper that is ignored by employers.”

Currently, it is easy for restaurants to ignore such codes as they are related to tax and national insurance guidelines, rather than the employment law. “The only way that a worker can complain is to accuse the company of tax fraud. It’s kind of an impossible situation. Young waiting staff are not going to understand that process.”

With the workforce of large restaurant chains being predominantly under the age of 30, Turnbull is clear that these companies are taking advantage and exploiting a vulnerable age group.

“What we find consistently is that people are not aware of their rights and, even when they are, they’re reluctant to then make any noise about them because they are worried about losing their job or getting a bad reference from the employer when they leave,” he explains, adding: “It’s been really heartening to see the workers at TGI Fridays. who are predominantly under the age of 30, really grasping the idea of what a trade union is all about and the need for workers to be organised independently of their employers.”

It has been two years since the issue was brought to the attention of recently appointed home secretary Sajid Javid, who was business secretary at the time and now has been replaced by Greg Clark. “Javid introduced his consultation regarding tips with a great fanfare that they were going to do something to resolve it. Two years later no action whatsoever has been taken,” says Turnbull. “We can’t have every two years a new scandal being exposed in the industry. It’s got to be settled one way or the other.”

As well as government reluctance to tackle the problem, Turnbull is also facing the power of the industry, with many restaurants chains owned by private equity funds.

Turnbull says the restaurant industry is ever evolving in its methods to undercut its workforce

“The industry is extremely good at lobbying, particularly through the Conservative Party,” he says. “They make sure their voice gets heard. Things that we thought would happen get delayed to give them room to manoeuvre”

Turnbull says the restaurant industry is ever evolving in its methods to undercut its workforce and is planning to oppose any future action by the government on tipping.

“I think they are already looking for ways around this, so that’s why the government really needs to bite the bullet now and say enough is enough.”

Turnbull is proud to have helped bring about one significant improvement for waiting staff, when he and fellow campaigners successful pressed companies such as Pizza Express to scrap the admin fees they charged staff to process credit and debit card tips.

“They were charging 8-10 per cent just for putting credit card tips on the payroll. Getting them to scrap that was a huge step forward.”

Turnbull says campaigns are beginning to help change the way customers are approaching tipping. “We get members all the time saying that customers do now ask questions, whereas 10 years ago it wouldn’t have crossed their mind to ask. They’re more likely to insist on leaving a cash tip if they’re not happy with the answer they get. I think there is a much better awareness now amongst customers.”

Turnbull is hopeful that his meeting with senior servants this week, accompanied by out-of-pocket TGI Fridays campaigners, will be a step in the right direction.

“Let’s see what happens. From our point of view the issue isn’t going to go away. We’re not going to stop campaigning on it. We’re not going to let it go away. Every time that we think we are really down at the bottom of the pit, we see some light and we get there in the end.”

If you have experience of poor tipping practices email kevin.gopal@bigissuenorth.co.uk