In the letter, entitled ‘Restaurant staff, valued in New York & Paris, sadly not in London’, Gunewardena outlines the different approaches governments across the world are taking to supporting their hospitality workers. He says that staff in France and the US, where D&D also operates restaurants, have been given a much fairer deal than those in the UK.
Speaking to BigHospitality, Gunewardena says that the government’s exclusion of tronc payments under the JRS was down to a “misunderstanding of the nature of tips and service charge”.
“[Hospitality] is a very specific case. In general, for the whole of the UK the 80% Government furlough is very generous so it has been a real kick in the teeth for some of our staff to be told their income is going to exclude tips, which is part of their regular incomes.”
In the letter, he points to moves in the US where it has added $600 per week to the standard 50% of earnings, including tips, to the salaries of waiting staff. This, he says, has resulted in many people’s wages being close to 100%.
“The US has looked after its staff better than [the UK}.”
“This is deeply unfair, discriminatory, and sends a clear message to restaurant staff in the UK that they are not valued,” he writes in his letter to the Chancellor.
Under the JRS, employers in the UK can claim a grant through HMRC to cover 80% of an employee’s regular wage up to £2,500 per month. However, earlier this month the Government confirmed that tronc payments would not be claimable under the JRS after the industry initially thought they would, a move described as "disastrous" by those in the hospitality sector.
A petition set up earlier this month calling on the Government to include tronc and service charge payments in the JRS has now received more than 24,000 signatures.
The letter in full
Restaurant staff, valued in New York & Paris, sadly not in London
My company D&D London owns and operates restaurants in the UK and overseas in New York and Paris. Our UK restaurants include Quaglino’s, Bluebird and German Gymnasium. We employ some 2,000 staff. When restaurants were shut down due to Coronavirus all governments stepped up to the mark to support temporarily laid off staff. In France unemployment benefit was already relatively generous, but the government improved the 75% salary offered to be based on a 39 hour not a 35 hour week. So our staff receive 85% of normal earnings. In the US the FED stepped in to add $600 per week to the standard 50% of earnings (including tips) to improve average New York waiters’ earnings to close to 100%.
In the UK however in a bizarre move HMRC informed the industry last week that the 80% furlough pay would exclude staff earnings from service charge. The service charge is a fixed proportion of customer bills (12.5% in most cases) which typically accounts for 40-50% of our UK restaurants front of house wages. These earnings are regular and needed for our staff to pay their bills. Our UK employees are therefore receiving under furlough, even with the addition of universal credit, only some 50% of their normal wages.
This is deeply unfair, discriminatory, and sends a clear message to restaurant staff in the UK that they are not valued.
I’m sure we in Britain value as much as the Americans and the French do the contribution of restaurants and the hospitality industry to our economy. And we are grateful for the extensive assistance given to date to employees and companies in our industry to enable them to get through this crisis. But the exclusion of service charge from furlough earnings appears to be an unfortunate anomaly that will affect hundreds of thousands of workers in UK restaurants.
I hope you and HMRC will reconsider your decision.