Print

Finance >> Browse Articles >> Personal Finances

Rate

Fair Tips, Fair Pay? Not in a Recession.

Fair Tips, Fair Pay? Not in a Recession.

Andrew Grice and Cahal Milmo | The Independant

August 18, 2009

Gondola, whose parent company controls assets worth £35bn including Bupa private hospitals, paid its six directors a total of £972,000 last year, with the best-remunerated receiving £311,000. The average salary for one of its restaurant’s staff was £12,800.

Pat McFadden, the Employment minister, said yesterday: "We believe that customers expect tips to go to staff in addition to the minimum wage – not to be used to take them up to the minimum wage.

“That is basic fairness for workers we rely on every day. This is a change we are going to make.” But he said no decision had been made on the timing.

The British Hospitality Association (BHA) which represents the hotel, catering and leisure industry, has asked Lord Mandelson’s Business Department to delay the implementation of the rules until April 2010.

Bob Cotton, its chief executive, said that would give restaurants time to prepare and reduce the prospects of job cuts. “Turnover is down by 10 to 15 per cent in the recession,” he said. “About 35 per cent of costs are labour costs. The first priority is to keep people in work.”

He insisted the BHA supported the Government’s move, saying private equity firms owned only two or three out of 50 restaurant chains and were “not driving” the industry’s campaign.

Last night, MPs and trade unions said the private equity owners of restaurants should not use the recession as an excuse to exploit low-paid staff. They urged the Government not to delay the new rules.

The Labour MP Michael Connarty, whose Commons motion backing The Independent’s campaign was signed by 95 MPs, said: “Companies like private equity firms, that are in it for big bucks and taking out disproportionately large amounts of money, have to be told this is about fairness. It is offensive to the public at this time if the lowest-paid workers are prevented from getting out of poverty when people at the top of these companies are trousering large amounts of money.”

Len McCluskey, the assistant general secretary of the Unite union, said: “Everyone, except greedy bosses, believes that tips and service charges belong to the hard-working staff. There is no justification for the British Hospitality Association to attempt to defend this loophole. A tip is a reward for good service and it should go directly to the people who earned it.”

He added: “This sector has so far failed to demonstrate its commitment to a fair and transparent tipping system. We cannot continue to allow them to abuse customer generosity.”

© 2009, YellowBrix, Inc.