Restaurant groups criticised for taking a slice of staff tips

By Sophie Witts contact

- Last updated on GMT

Restaurant groups have defended administration charges on tips
Restaurant groups have defended administration charges on tips

Related tags: Pizza express, Credit card

Restaurant groups including Pizza Express and the Casual Dining Group (CDG) are facing criticism for deducting a percentage of staff tips paid on credit card.

Pizza Express charges staff an eight per cent fee, while CDG - which owns Café Rouge, Bella Italia and Belgo - takes ten per cent.

The Unite union is calling on the chains to drop the practice, which it says unfairly penalises waiting staff, and is due to protest at Pizza Express's London Coptic Street on 10 August.

Both groups claim the fee is a standard administration charge covering the costs of running a tronc system – the method used to process and distribute card tips through the payroll.

However Unite is arguing that high street rival The Restaurant Group (TRG), which owns Chiquito, Frankie & Benny’s and Garfunkels, dropped its 10 per cent tronc charge several years ago.

Dave Turnbull, Unite officer for the food and drink sector, said: “Whether you use a tronc system or not, the fact of the matter is that Pizza Express charges staff to process tips while many other restaurant groups don’t.  If they can do it, why can’t Pizza Express?  

“So you see it’s a choice – you can deduct an admin fee or not – and Pizza Express has chosen to skim a slice of their employees’ hard earned tips for no other reason than it can.” 

While Unite estimates that the chain could be pocketing as much as £1m from the charge, Pizza Express has denied it profits from the practice.

It says the tronc system is run ‘by employees for employees’, with the remaining 92 per cent of each tip split 70/30 between waiting staff and back-of-house.

A spokesperson for Pizza Express said:  “The allegations made by Unite in relation to PizzaExpress and tipping are incorrect.

“All cash tips go straight to the waiters who’ve earned them.  It is then their responsibility to ensure that they declare any earnings they’ve made through cash tips to HM Revenue and Customs (HMRC) so they can be appropriately taxed.

“To cover the administrative costs of ensuring that the tronc system is managed correctly and fairly, and so that we meet our legal obligations as an employer, a small administrative fee of eight per cent is levied on the tronc.”

A spokesperson from CDG told BigHospitality that the ten per cent charge it placed on credit card payments was developed in full consultation with staff.

They said: “We were legally obliged to put a system in place on the back of government legislation.The ten per cent charge on credit card tips covers a number of costs including credit card fees, payroll bureau processing and direct house and administration costs.”

Despite being named on Unite's website CDG said it had no plans to remove the charge.

“We don’t feel the need to respond to Unite as they only represent a very tiny fraction of our staff and they haven’t been in contact with us directly,” a spokesperson told BigHospitality.

“Within our business we have regular opportunities for staff feedback including employee forums and at no stage has this ever been brought up.”

Unite has said that it is planning to stage further demonstrations throughout the summer.

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