Greg Wright: Why restaurants must serve up a fair tipping policy

Who should pocket the tips for great customer service?

All the proceeds from tips, should of-course, go to the restaurant workers who have delivered the service that helps the business to prosper.

Sadly, this isn’t always the case, and it’s high time the Government took action to stop customers being misled.

The fact that many tips do not go to the workers who provide outstanding service offends every notion of fairness.

Regular readers of this column will recall that I raised concerns about this scandal in April this year, after I was contacted by an academic from Leeds, who painted a troubling picture.

The woman, a respected lecturer, told me that her 16-year-old son had secured a job at a restaurant, and she had been dismayed to discover that waiting staff were not permitted 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.

“I am left wondering about the extent of this practice across our region, and whether young people - willing to work hard and earn money through decent means - are seen as easy targets for restaurant owners. I would very much like to know which restaurants actually give customers’ tips to their staff, and which just pocket it.”

It seems that these concerns are finally being shared by the Government.

The Business Secretary Sajid Javid has 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 is calling for evidence about how restaurants deal with tips, and it will consider whether further action is necessary.

It will, for example, consider whether there should be a cap on the proportion of tips restaurants can withhold from staff for administrative costs and, if so, what this level should be.

This may sound like a welcome move to protect workers’ rights.

But why should the Government even consider legitimising a system that will make it lawful for an employer to pocket some of the tips intended for their staff?

And how could the hard-pressed Government agencies police this system?

Dave Turnbull, of the trade union Unite, said: “Capping admin fees will simply legitimise the underhand practice of restaurants taking a slice of staff tips and be near enough impossible to enforce..

“Rather than tinkering around the edges, Sajid Javid should be looking to scrap what is effectively a tax by restaurant bosses on money meant for the pockets of hardworking staff.

“The principle ought to be that the tips go to those who have earned them, plain and simple.”

According to Mr Turnbull, this issue should have been cleared up years ago through a code agreed by employers, consumer groups and the unions.

Nobody doubts that running a restaurant can be a tough job.

Competition is fierce, consumer tastes are always changing and rents in the best locations can be eye-wateringly high. On top of this, you’ve got staff costs and mounting levels of red tape.

But as a customer, you have a right to know exactly where your cash is going.

At the very least, the restaurants should be forced to tell customers about their tipping policy, so all staff are treated fairly.

After all, it’s impossible to imagine a FTSE 100 chief executive allowing somebody else to pocket their performance-related bonus.