A media frenzy of newspaper reports claimed that the restaurant chain had admitted it retains the money in order to pay staff above the minimum wage.
However a Cote spokesperson said: "We can confirm that, contrary to recent press reports, Cote distributes the service charge income to the restaurant level employees at which the service charge was collected. The individual restaurant manager allocates the service charge across all restaurant level employees, as we believe it is important to recognise those preparing the food or cleaning the kitchen, in addition to the front of house staff.”
Cote said this service charge element is always paid in addition to a base amount which is at least equal to the national minimum wage. It said it is paid through the payroll, net of taxes and NI. It said that the company policy is that where customers leave a cash tip, it is at the waiters’ discretion to keep it for themselves or to include it in a general pot with other members of staff.
Under the voluntary code of practice of trade group The Restaurant Association it advises that if a customer is providing a tip this must go the employee. In the case where a service charge or tip is non-cash then the restaurant may deduct variable handling charges for costs incurred such as credit card charges, banking charges, payroll. However, all deductions must be explained to staff.
Ufi Ibrahim, chief executive at the British Hospitality Association said: “Customers should not feel obligated to tip, especially when service is substandard. Remember that tipping fosters a service culture and it encourages people to work in the industry. Given that hospitality and tourism employs three-million people in the UK, anything we do to support and encourage those three-million to keep up the good work is beneficial. ”