Government legislation on tips is misguided, say operators

Three of the country’s leading chain restaurateurs have accused the Government of punishing the many for the crimes of a few by introducing new legislation on staff tips.

The Government is set to close the loophole that allows restaurants to top up the minimum wage with tips after a long-running campaign by trade unions.

But, speaking last week at an H-Talk event in London, the men behind Yo! Sushi, Lock Fyne and La Tasca warned that legislation would make the situation worse for all.

Robin Rowland, chief executive of Yo! Sushi - which has always paid full minimum wage - said with margins so tight in the restaurant industry, it was completely unfair to accuse operators of profiteering.

“The Government’s involvement is politically motivated and comes without knowing the economics of the industry,” he said. “Yes, some operators have profited from this practice and should be shamed, but the Government has stuck its nose into something it doesn’t understand - at a very bad time for the industry.”
 
Mark Derry, chief executive of Loch Fyne Restaurants, claimed that “staff were the last people that wanted this shaken up”. “It’s often asked if we are ripping the customer off with this, but what the customer does not understand is that the tips pool is greater than the profit pool in many businesses,” he said.

James Horler, the former chief executive of La Tasca who is now chairman of restaurant chain Ego, suggested a system akin to the US - where different job positions attract different minimum rates of pay and tips make up a larger percentage of wages - would be better for UK employees and employers alike.

“Staff in the US go to work to provide a great service,” he said. “The (national minimum wage) system here is holding us back - it’s draconian and doesn’t work for our industry.”

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By Chris Druce

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