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Greg Wright: Time to stop unscrupulous restaurants pocketing tips

File photo of credit cards    Photo: Rui Vieira/PA Wire
File photo of credit cards Photo: Rui Vieira/PA Wire
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PAY is an emotive topic, and with good reason.

It’s a competitive world, and much of our sense of worth relates to the size of our pay packet.

At the top end of the scale, executive pay has been dragged back into the spotlight, with shareholders finally building up the courage to flex their muscles.

Last week, shareholders in BP rebuked the company’s board when they voted to reject its remuneration report for the last year, which included a pay deal of 19.6 million dollars (£13.8m) for chief executive Bob Dudley.

Sadly, the vote against the pay deal is only advisory, as shareholders have no power to veto it and Mr Dudley has already been paid.

We could be about to see a repeat of the shareholder spring of 2012. But my focus is at the opposite end of the pay scale. Last year, I was angered by reports that many waiting staff were not being allowed to keep tips for good service. It’s the equivalent of allowing somebody else to pocket your performance related bonus. I don’t think a FTSE 100 chief executive would stand for that.

I became aware of this controversy after I was contacted by a female lecturer, who said she had been shocked by some of the practices at the restaurant where her 16-year-old son was working. She said that waiting staff were not allowed to keep tips.

As she said at the time: “If customers knew that their tips were not going to the waiting staff, but rather straight to management, then they may think twice about leaving anything.”

She was concerned that young people might be seen as easy targets by some unscrupulous restaurant owners.

In August 2015, it seemed that the Government was finally going to act to stamp out such unethical behaviour.

Business Secretary Sajid Javid ordered an investigation into the apparent abuse of the tipping system in some restaurants.

To quote Mr Javid: “When a diner leaves a tip, they rightly expect it to go to staff. In full. I’m concerned about recent reports, suggesting some restaurants pocket tips for themselves. That’s just not right.”

The Government immediately called for evidence about how restaurants handled tips, and said it would consider whether further action was necessary.

The trade union Unite submitted evidence to the Government and called for staff to be given 100 per cent of the tips.

According to Unite, submissions closed in November, and the union is still waiting for the Government to act.

Unite regional officer Dave Turnbull has been unimpressed with Mr Javid’s response.

He said last week: “He needs to stop dithering and stamp out these rip-off practices once and for all... until the Government introduces mandatory rules on tipping, unscrupulous bosses will continue to dip into tips and skim off the service charge to cover everything from breakages, till shortages and customers who walk out without paying, as well as so-called administration costs.”

When I contacted the Department for Business, Innovation and Skills, a spokesman told me that the Government is committed to making sure working people receive a fair deal on pay.

The spokesman added: “Precisely because of this the Business Secretary ran the call for evidence on tipping practices. We will announce our next steps shortly.”

This issue should have been resolved years ago, through a code of conduct agreed by employers, consumer groups and unions – and backed up with tough enforcement action.

All the proceeds from tips should go to the workers who provide the great service that allows a business to flourish. Allowing management to pocket tips is also an insult to the customers’ good sense.

If the Government is serious about supporting hard working people, it must act now.