Workers at a chain of restaurants spun out of London celebrity haunt the Ivy say they are losing out after the company cut their share of the service charge paid by diners when the legal minimum wage rose in April.
The Ivy Collection, which operates nearly 40 restaurants in the UK and Ireland, pays all waiters, chefs, some managers and support staff in its outlets the legal minimum wage of £10.42 for over-23s plus an hourly “commission” rate graded to their position and location.
Workers get the same hourly commission no matter how much is collected from the service charge during their working hours, under a system first revealed by the Guardian in 2017.
Cash tips paid by diners on top of the service charge, which are legally seen to be owned directly by staff, are allocated separately, as are those made via credit card.
Some Ivy staff claimed April’s change to their service charge allocation had wiped out any benefit they should have seen from the increase in the minimum wage. It came even as the restaurant business, controlled by billionaire restaurateur and fashion tycoon Richard Caring via his Troia (UK) Restaurants group, increased its menu prices.
It is not clear what happens to any excess service charge after the set commission to workers has been paid, but the Unite union estimated in 2017 that ordinary waiting and kitchen staff could be receiving less than half of the service charge under the Ivy Collection’s pay system.
It’s likely the group’s system will have to change next year when a new law which requires operators to pay staff 100% of their tips, including the service charge, comes into force. The government is to consult on a code of practice to govern how service charge and tips are allocated but the new law states this must be done in a “fair and transparent” way.
A spokesperson for Troia (UK) Restaurants Ltd, in which Caring owns between a 50% and 75% stake, according to filings at Companies House, said: “Every single member of our staff is guaranteed to be paid above the national minimum wage and all cash or credit card tips are kept directly by the member or members of the team who received the tip.”
The set commission for an ordinary waiter, which is taken out of the service charge of up to 13.5% that is automatically added to diners’ bills, was slashed in April from as much as £1.60 an hour for waiting staff outside London to as low as 75p – an 85p cut – according to workers.
Some staff in the capital, where some workers were getting more than £4 an hour in commission before April, said they had seen no change in their pay since the minimum wage went up. One worker said his cut of the service charge had gone down by more than 90p an hour.
The change to workers’ commission came after the legal minimum wage for those aged 23 and over rose by 92p from £9.50 to £10.42.
Bryan Simpson, who organises hospitality staff for the Unite union, said: “We believe our members are not getting their full share of the service charge which the diners assume goes entirely to them.”
Workers spoken to by the Guardian said the Ivy Collection had not informed them that their share of the service charge would be cut. The workers only discovered what had happened after asking managers why their pay did not appear to have risen after the minimum wage increase.
“I was a bit confused,” said one worker. “My manager told me they had been contacted by head office and told to do it.”
Allocation of the Ivy group’s service charge is managed via a “tronc” in which a committee of staff members is supposed to decide on how the money is shared out, in partnership with a “troncmaster”.
However, staff at Ivy Collection restaurants said they had no idea how to contact the committee and get details of how the service charge pot was shared.
“There is no information available,” said one worker. “The prices on the menu have increased but staff are getting less.”
He claimed that he was losing out on up to £40 a week from the changes in the tronc allocation at a time when his bills were rising. “My rent has increased and although we got the minimum wage increase I feel they are taking money away and none of us know where any of that money goes,” he said.
Another worker said: “My rent has increased by 50% this year but my wages will be the same. Legally they can do this as long as they pay the minimum wage but it is not fair.”
Another worker, who recently left the Ivy group, said the cut in her share of the service charge was particularly painful as it came after cash tips, which are shared out among staff in the restaurant where they are paid, have dwindled to almost nothing after a swing to card payments during the pandemic. She said diners were also less likely to leave a cash tip after menu prices at the chain’s restaurants had risen.
“I left to work somewhere else,” she said. “I couldn’t afford to live, I have a mortgage I need to pay. Everybody is struggling.”
