Staff to be balloted over chain’s plan to give service charge cash to kitchen staff in lieu of pay rise

This article is more than 2 years old

This article is more than 2 years old

TGI Friday’s is facing the first strike over tips in the UK in an escalation of a row between waiters and the restaurant chain.

In February the casual dining chain, which has 83 outlets, proposed redistributing 40% of service charge payments paid on credit and debit cards to back-of-house employees, including kitchen staff, in lieu of a wage increase.

Waiting staff are angry about the loss of card tips, which the Unite union claims they were not properly consulted about. Kitchen staff are said to be unhappy about swapping a rise in basic pay for a share of tips.

Tips distributed via an automatic system called a tronc are excluded from national insurance, but that also affects the calculation of statutory payments such as redundancy, maternity pay and pensions.

The company has denied that the decision to award kitchen staff a bigger share of tips was for tax reasons.

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Unite said it would ballot workers at two TGI Friday’s restaurants about strike action over the new tips policy and allegations of unpaid trial shifts. Ballots will start in Covent Garden in central London and Milton Keynes next week, while there will be a protest outside the Covent Garden restaurant on Friday.

“Our members are bravely fighting back against a system that forces workers to live on low pay and without income security,” said Unite regional officer Dave Turnbull. “They have decided to ballot for strike action in a wave of rolling strike ballots over the coming months because their employer has refused to address their concerns on tips and other issues.”

The potential strike action comes as the government faces renewed pressure to crack down on restaurants that ask waiters to hand over some, or all, of their tips.

Some restaurateurs are using a variety of methods to withhold service charges paid on cards from staff as their profits are squeezed by a combination of the rise in the national minimum wage, increased competition and flagging consumer spending.

Some are requiring waiters to pay a percentage of the sales they have generated to management, or persuading all staff to cut their wage rate to the legal minimum and make up the difference using tips.

Such practices remain in place nearly two years after the completion of a government consultation on proposals to tackle unfair handling of tips after revelations in the Guardian and other papers.

A number of prominent retail chains, including Pizza Express, changed their policies in the light of consumer pressure. Last year Harrods agreed to let staff keep 100% of the money raised from restaurant tips following a union-backed protest.

But others, such as Caribbean restaurant group Turtle Bay and The Ivy Collection chain continue to take a cut of the service charge.

Darren Jones, a Labour MP who recently highlighted the issue of tipping in parliament, said: “There is a theory that each time the government increases the living wage, businesses are trying to offset the cost by bringing in money from other sources such as tips. This isn’t good enough.”

He said taking a share of the service charge was currently legal as long as workers received the legal minimum wage over a reference period, such as a month or week. But he said consumers expected tips to go to workers, and the government needed to legislate to protect vulnerable staff.

The government said action on tipping was still “under consideration”. TGI Friday’s did not respond to a request for comment ahead of publication.