Behind the scenes at Britain’s swankiest restaurants, low paid workers are getting ripped off by their billionaire bosses.
Harrods, retailer to the filthy rich, just got caught out. The luxury London department store is in hot water after not paying workers in its 27 restaurants, bars and kitchens their full tips.
Restaurant workers said that management are keeping 75 percent of the service charge added on to the bill for the meal.
And Harrods is just the tip of the iceberg. Thousands of restaurants up and down Britain operate the same scam. And the workers know exactly how much they’re being robbed of—because they’re the ones who have to add it all up.
Waiters at a London chain of clubs told Socialist Worker how they have to provide their own cash floats—meaning they have to calculate exactly how much they are taking off customers.
So they know how much they should be receiving in wages if the service charge were correctly accounted for. How much they actually get comes nowhere near.
The United Voices of the World (UVW) union, which represents workers at Harrods, has said that workers are missing out on £5,000 a year in tips. That’s a lot of money when you’re on poverty wages.
Hector worked as a waiter for a catering firm. Over the three years he worked for them, he received no sick pay or any guarantee of minimum hours.
“I was on no contract for the first three months—it was the same for all other workers. They told us it was a trial period, they might get rid of us after that.
“In the first week I worked close to 70 hours because I desperately needed a job. Some people work these hours every week.
“But no matter how long the shift was I only got one half hour break every 12 hours.”
Hector’s payslips show that some months he would earn as little as £550. In London this is barely enough to cover rent and bills unless you share a room with several people, which many workers are forced to do.
While workers struggle to get by, the bosses are raking it in. Harrods’ turnover last year was £788.9 million with profits of £168 million. It paid over £100 million in dividends to its parent company.
In May last year Tory Sajid Javid, then business secretary, said that he would stamp out service charge abuses.
He said, “All discretionary payments for service should be received, in full, by workers where appropriate.”
But this was only after a series of protests outside Pizza Express and other chains forced the firm to pay workers the full amount of the service charge. And he dropped it as soon as it was out of the public eye.
Harrods has also said that it will find another way to distribute the charge after protests drew attention to their robbery.
But stealing service charges is nowhere near the limit of how far the bosses will go in their drive to squeeze profits out of workers.
They employ people on salaries, or pay by the shift, then add hours until workers are effectively being paid under the minimum wage (see below).
Across Britain people work in hot, windowless rooms sweating to produce fine food for the rich while their bodies break from bending over stoves for 12 hours a day or more.
“I feel like a fucking slave,” Francisco, a chef in central London, told Socialist Worker. “They say, come here, you do a job. Then you work, work, work until you’re kaput and then they throw you away.”
“There is bullying and racism every day in the kitchen,” he added. “Hard drugs are a big problem too. But then, how else are you supposed to work three double shifts in a row, each one 15 hours?”
To escape the kitchen, Francisco started work for the Deliveroo delivery company. But after fracturing his arm in an accident he was forced to go back. A doctor told him that he would need his arm in a cast. But Francisco said, “I told the doctor, I have to choose between working and being homeless. I need to work so don’t put it in a cast, make a splint.
“I then went to work as an agency chef. It took months for my arm to heal. Because of this I will have problems with my bones when I am older.”
Catering workers are forced to work for long hours, sometimes finishing at 1am. This means the amount of time between shifts can be as little as six hours.
The legal minimum amount of time that companies are supposed to give people between shifts is 11 hours. This is completely ignored by restaurant bosses.
People are forced to accept brutal conditions and bullying management because there is no alternative. That is especially true for migrant workers.
Both Hector and Francisco described coming to London with no money and having to take the first job available out of desperation.
“As a migrant the pressures on you are different,” said Hector. “You have no safety net. I couldn’t speak English and had to take the first job I could find.”
Unions need a new restaurant recipe
The Tronc system is used by bosses to pay workers under the minimum wage.
They can do this because service charges are a “compulsory charge”. That means that service charges usually show up on pay slips as regular wages—there’s no way to distinguish between the two.
Bosses claim that to process a service charge costs 25 percent of the charge.
Even taking that into account, some front of house workers Socialist Worker spoke to said that they should be getting up to £18 an hour.
And when it comes to chefs and kitchen staff, the picture is just as grim.
Chefs at an AA Rosette-rated restaurant just outside Manchester showed Socialist Worker weekly pay slips of as little as £266. This was for a 60 hour week. That effectively brings pay to less than £5 an hour.
And the story is the same across the industry. At one popular hotel franchise chefs are paid £20,000 a year for an average 40-hour week.
But they are then told to work over 60 hours a week, bringing their rate of pay to under the minimum wage.
Low trade union density in the industry and a culture of bullying mean that workers constantly fear for their jobs.
“You can’t say anything because they’ll sack you,” Chris told Socialist Worker. “Everyone’s scared for their job.”
The small size of restaurants and similar businesses means that organising is often difficult. A 2010 report shows that 80 percent of “restaurant establishments” employ less than 10 people. Only approximately 2 percent employ over 50 people.
Working in small workplaces often means close proximity to the boss—but it’s still possible to organise.
There have been successful strikes by small groups of workers in the past year. And Fast Food Rights and other campaigns have made great advances. The anger is there for people to get organised in the catering industry. People are already doing it in isolation.
Socialist Worker was told of workers taking letters to management at private members’ clubs in London, filing grievances and winning demands with little union backing.
It’s a scandal that some trade unions haven’t seriously organised in the industry.
When Hector organised workmates to go and see a Unite union rep they had to travel across London, taking the day off work. When they arrived at the office the rep told them there was nothing he could do.
“When we showed him our contracts he said, ‘I’m almost as angry at people for signing these contracts as I am at the employer for issuing them’,” Hector said.
It’s time for the trade union movement to start taking the millions of workers in the sector seriously.
Conditions and pay are brutal and need to change.
Tronc tips system is tonic for the bosses
A Tronc is a system for centralising and then distributing tips that have been collected through customers paying a service charge on their bill rather than a cash tip.
It is organised by one person, almost always a manager, called a “troncmaster”.
The UVW union which organises workers in Harrods has called for the “election of a committee to monitor, evaluate and report on the activities of the troncmaster.” Even better would be to ensure workers get a decent wage without having to rely on tips to get by.
Because the service charge appears on a bill it counts as a “compulsory charge” and appears on pay slips as taxable income. There is no way for workers to know which part of their pay comes from Tronc and which is paid directly by the company.
Neither the employer nor workers are liable to pay National Insurance Contributions on money received through the scheme.
This effectively means huge reductions in tax for managers. It also means that it’s in employers’ interests to pay as little as possible in actual wages and to make up as much pay as they can from the service charge.
But several high street chains and restaurants have started to cave in over their tipping practice after a sustained campaign by workers and their supporters.
Top tips for fighting back
Around 100 people joined a protest outside Harrods in west London last Saturday.
They were demanding the department store pays its restaurant workers the whole service charge
Harrods bosses are under pressure and want to stop the United Voices of the World (UVW) union from organising.
Cops protected the store and arrested four protesters, including UVW general secretary Petros Elia.
UVW has won significant victories through militant tactics.
One of the workers at the store spoke to Socialist Worker about recruiting to the union.
“The tips started getting less and less each month until we were getting half of what we had been,” they said.
“We got in touch with the person who distributes the tips in October to ask where the money was going.”
At a meeting last Wednesday workers met with management, who admitted that they were only giving half of the service charge to workers.
Meanwhile, Harrods has posted record profits.
“We couldn't understand how the store was making more and more money and we're getting less and less of the service charge,” said the worker. “We've had so many people join up in the last three months.
“It started off with just four of us.
“After the protest, everyone's happy. Before, everyone was scared. Either we stick together or we'll lose."
Harrods' food department is the largest in the store. Over 450 people work in 27 restaurants and kitchens.
Some 150 people work in the basement production kitchen alone.
The campaign follows protests last year which forced chain restaurants such as Pizza Express to hand over the service charge to workers.