The British Hospitality Association (BHA) is urging all restaurants to adopt a new Code of Practice on how to distribute service charges.

The Code has been developed in conjunction with the Department for Business, Innovation and Skills to back up new legislation banning the practice of topping up minimum wage with service charge, which comes into force on 1 October.

The legislation followed a long-running union campaign that highlighted the low basic salaries paid by many of the UK’s major restaurant operators.

BHA chief executive, Bob Cotton, admitted that the controversy over the service charge had damaged the sector’s image.

“If we can ensure that every restaurant accepts and adopts the code, the industry will have done much to reinstate its reputation,” he said.

“We must put behind us all the critical comments the restaurant industry has had to endure in the last year and make crystal clear that the BHA and the Restaurant Association supports total transparency in this area.”

Cotton said that members of the BHA's National Restaurants Group - which represented the vast majority of chain-owned branded restaurants in the country - had accepted the code.

“Some groups have already been providing this information for customers for a number of years,” he said. “I confidently expect it will be widely adopted by the whole industry.

The 30,000 other restaurants in the country will also be encouraged to adopt the code, Cotton added.

“Consumer pressure will no doubt play its part in this as customers ask for similar information of independent restaurants to that provided by the major groups,” he said. 

“But we hope that all restaurants will voluntarily accept the code before consumer pressure might begin to force the government to consider a statutory approach.”

Code of Practice:

• Restaurants should display on their website or in some other easily accessible form, an explanation of how the proceeds of the service charge are distributed to staff in accordance with the restaurant's arrangements.
• It should be made clear whether the proceeds are shared between the restaurant and the staff, and whether the distribution is controlled by the restaurant or by a representative of the employees.
• If a percentage of the service charge is held back by the restaurant to cover administration or other costs, that percentage is explained and is made clear.

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By Daniel Thomas

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