Workers are considering legal action against several high-end London restaurant owners, including Harrods, Savoy Grill, Ivy and Wolseley, who add a cover charge to diners’ bills that workers do not get.
The law, which took effect in October, requires business owners to hand over all tips and service charges to employees. However, many restaurants add a mandatory cover charge as well as a service charge and only pass the latter on to the staff.
Harrods workers say they will write to conciliation service Acas as the first step towards an employment tribunal case backed by the United Voice of the World (UVW) union to deal with the £1 cover charge imposed at their restaurants. Some workers went on strike this weekend in a dispute over conditions including pay and levies.
Alice Howick, a member of the Harrods waiting staff and UVW member, said: “We are arguing that the cover charge is a type of service charge in which an extra amount is added to the customer’s bill before it is presented to the customer. At the moment, all the revenue from the cover charge is going directly to the company, but we believe it should go to the employees.
“We have serious concerns that our service charges, which make up a large proportion of our income, will be affected in the long term.”
Brian Simpson, lead organizer for the hospitality sector at Unite union, said it was also considering legal action against businesses charging cover charges they have not passed on to workers.
He said the union was working with the Department of Business and Trade to address any potential loopholes as part of the consultation on the new Employment Rights Bill.
“Unite is absolutely clear that cover charges are tips for the purposes of the Employment (Allocation of Tips) Act and any attempts by employers to defraud customers of what is clearly a service charge are unethical, if not illegal. Will happen,” Simpson said.
“Following multiple reports from Unite members in fine dining that some of the country’s most prestigious brands are using ‘cover charges’ to shift funds meant for workers to improve their profit margins, we are currently involved in Considering legal action against the companies. ,
The Wolseley in London’s Piccadilly charges a cover charge of £2.50 on top of a 15% service charge added to bills, which is already at the expensive end of the spectrum, with French onion soup at £10.50 and fishcakes at £27.50. As a result, a bowl of soup can now cost £15.57.
The Wolseley’s sister restaurant at The Aldwych, Delaunay, asks for a cover charge of £2 in addition to a 15% service charge. The company says that both the restaurants have been charging cover charges since opening. Fees at Wolseley have increased by 50p from 2022.
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Hospitality entrepreneur Richard Caring’s empire adds a £2 per person levy on top of larger service charges at his London flagship Ivy restaurant in West Street, Soho, as well as Sexy Fish, Scotts, J Sheekey and Bacchanalia. The restaurant said the fee has not been implemented recently.
The Savoy Grill, another well-established restaurant run by Gordon Ramsay, also adds a £2-per-person cover charge on top of a 15% “gratuity”. It said a cover charge had been in place since it opened.
The law changed in October so that all tips and service charges must now be paid to the employees who earned them, rather than retained by employers. The law says it applies to all tips, gratuities and service charges paid by customers, however they are described.
Any employer who breaches the law can be ordered to pay compensation of up to £5,000 per person for financial loss. Employees who believe they are not being treated fairly must first consult Acas and may have to approach a tribunal to secure a decision.