An upmarket steakhouse at an exclusive London hotel is being accused of topping up managers’ salaries by handing them tips intended for waiters.
Trade union Unite claims four senior managers at STK London in the ME London Hotel on the Strand had their pay boosted to around £50,000 a year.
It has calculated that nearly two thirds of the 15% service charge added to every bill was handed to managers rather than serving or kitchen staff. The union says the company also siphons off 6% of the service charge paid by customers as an “admin fee”.
Unite national officer Rhys McCarthy said: “Restaurants and bars were banned from using tips to top up staff wages to the legal national minimum back in 2009, but that clearly hasn’t stopped STK from finding a nifty loophole to subsidise managers’ wages above and beyond the national minimum wage.
“It is the ultimate kick in the teeth for customers and staff alike, if restaurants are allowed to dip into tips and the service charge without a shred of transparency of how the money is being used or who is benefiting from it. If managers are not prepared to reveal what portion of the service charge and tips they are pocketing, then they should leave them alone.”
The union is planning protests against Melia Hotels International, the Spanish owners of ME London and the White House in Regents Park, because the company has refused to reveal details of how tips are divided.
Like many restaurants, STK distributes the service charge, often paid on credit and debit cards, using the “tronc” system. The system pools the charge paid by customers and they can be distributed to different staff in a variety of ways to reflect hours worked or the role of staff in an establishment.
The tronc system has proved controversial, as some restaurants charge an administration fee for operating it. Last year it emerged that Pizza Express and fellow pizza chains Ask and Zizzi were siphoning off 8% of the tips paid by card as an admin fee. Café Rouge, Bella Italia and Belgo were deducting 10%, as do Strada and Giraffe, which is owned by Tesco.
Pizza Express, which was the first restaurant to come under the spotlight for its tipping policies, reversed its policy of taking a cut from tips after a union campaign and a backlash from customers.
In August the business secretary, Sajid Javid, launched an investigation into the abuse of tipping following articles by the Guardian, the Observer and other newspapers about dubious tipping practices.
The investigation received more than 200 responses to its call for evidence but Javid has yet to publish his findings.
The union is targeting Melia which it says should reveal details of its tronc system under a global agreement with the International Union of Food, Agricultural and Hotel Workers (IUF-UITA) to promote ethical standards, including the right of workers to organise collectively.
Guillaume Marly, general manager at ME London, refused to comment directly about how much money was paid to managers, or on the union’s claims over the 6% admin fee.
He said: “ME London follows standard hospitality industry practice through the use of the tronc system. We are currently reviewing the service charge policy and have made great progress in our discussions with our employees and the union, to ensure that it reflects our staff and customers’ views.”
