Cotswold Issue: The Tipping Point
PUBLISHED: 13:37 18 January 2017 | UPDATED: 13:44 18 January 2017
The meal was great, the service, impeccable. So what really happens to that ‘discretionary’ charge you’d expected to go to the hard-working staff? Mark Taylor looks under the plate and talks to restauranteurs about this thorny topic
David Cameron may have once left a £50 tip at Pizza Express but as far as apocryphal stories about restaurant gratuities go, they don’t get much bigger or better than the one about the new US president.
After running up a tab at The Buffalo Club in Santa Monica in 2007, Donald Trump grabbed the bill and asked the waiter, “what’s the biggest tip you ever got?”
When Billy the waiter replied that film producer Jerry Bruckheimer once tipped him $500 on a $1000 bill, Trump nodded his head and said “you’re very good at your job” before adding a $10,000 tip to the $82 bill.
There must be thousands of waiters and waitresses in the UK hoping that Mr Trump pays their restaurants a visit when he jets in to Downing Street this year.
Until then, most front-of-house restaurant staff - the majority of them paid the minimum wage - have to rely on more modest tips to make ends meet.
Gone are the days of a simple tip jar next to the till shared out between staff at the end of the day. And long gone are the days of slipping a crisp £10 or £20 note into the top pocket of a suited-and-booted maitre d’ - themselves as rare as a tableside flambé or creaking cheese trolley.
Although many smaller, independent restaurants keep simpler arrangements when it comes to distributing hard-earned tips between all staff - from waiters and chefs to those washing the dishes and cleaning the kitchen - service charges can be a minefield for both staff and customers alike.
A number of the larger restaurant chains have received plenty of bad press over the past couple of years about their more complex and controversial methods of sharing the tips.
Two years ago, Latin American food chain Las Iguanas was exposed for running a system of asking staff to pay an ‘administration fee’ of 3% (it went up to 5.5% in London) of their table sales. The company soon bowed to pressure and removed the policy after a newspaper expose and a 90,000 signature petition. Staff at Las Iguanas now get to keep 100% of their tips.
This most high profile case brought the whole issue of service charges and tipping policies into much sharper focus, but it’s still a thorny issue, with many restaurants simply using tips to ‘top up’ low staff wages.
With many restaurants now slapping an automatic ‘discretionary’ service charge of 12.5% - in some Michelin-starred restaurants around the UK, this can rise to 15% and even 25% - and overall restaurant bills rising due to the increased costs, tips can be a significant and much-needed bonus for staff on low wages, but it’s not always transparent.
Every restaurant has its own system, with many of the larger establishments and chains using a “tronc” system, where all the tips are collected and distributed evenly between all staff (according to the HMRC, a tronc is a ‘separate organised pay arrangement sometimes used to distribute tips, gratuities and service charges’. The tronc is managed by a ‘tronc master’ - usually the restaurant manager).
Gareth Fulford is the chef and co-owner of Purslane in Cheltenham, a restaurant that doesn’t automatically add a service charge to the bill unless it’s a larger party - and even then it’s optional.
“We prefer to leave it to customers to decide whether a tip is deserved and, if so, how much that should be. It can be quite crude to automatically expect them to leave one. The optional service charge we add to bills for larger parties is simply to reflect the extra effort and attention they require.
“We don’t run a full tronc system but we’re such a small team (six people) that it’s all very transparent as to what’s been left by customers. We share out the tips, both left in cash and on card, equally between our staff members depending on how many shifts they’ve worked each week.”
Gareth doesn’t agree with the controversial policies of certain restaurant chains which make waiting staff pay a percentage of the tips back to the restaurant, and he has his reservations about the increasingly common 12.5% ‘discretionary’ charge.
“It strikes me that ‘fat cat’ corporations are taking as much as they can in profit and being very disrespectful to their staff in the process.
“A 12.5% charge is becoming more and more common these days for no apparent reason - regardless of whether it’s at a three-star Michelin restaurant in London or a national chain.
“Many places will automatically add it to your bill and leave you feeling uncomfortable about challenging it if you don’t feel the service was up to scratch, despite the fact it’s a ‘discretionary’ charge.
“If it’s going to appear on the bill regardless, the service should be beyond reproach and unfortunately there are establishments that fall short and yet still list it on their bills.
“At Purslane, staff get 100% of the tips whether left in cash or on card so how it’s left is irrelevant. Giving cash to one particular server negates the input the pot wash, the chefs and the person at the bar has had in your experience.”
A former waiter himself, Nathan Lee is now co-owner of The Ox in Cheltenham. As somebody who started on the shop floor, he has strong views about how tips are shared out.
“We’ve had a tronc system at The Ox since the beginning, and the way it works is that a member of staff, normally a manager, takes control of the tronc to work out the distribution of those tips via a spreadsheet.
“We currently split them amongst the managers, floor staff, chefs and kitchen porters so that everybody gets a share. I don’t think it’s fair that the person that delivers the plate gets to keep the entirety of the tip as a lot of different people contribute to that one table’s enjoyment.”
It’s a view shared by chef Andrew Kojima who runs regular pop-up restaurants in the Cotswolds, with service charge left to the customer’s discretion.
“We have a tronc system which is split equally between everyone in the team, front and back of house. It works for us as the team is small, we are all working the same hours and everyone is pulling their weight.
“I know of some places where tips only go to the front of house workers. I see that as unfair because delivering good hospitality is a team effort.
“Personally, I think the fairest way is to ensure all staff are well paid in the first place. But the risk is that our prices appear more expensive on the menu, even if the overall bill still represents good value for money.
“As a customer, I generally give cash, and if I don’t have enough, I ask about the restaurant’s policy before adding it to the credit card bill.”
But what is best practice for diners who want to ensure the waiting staff keep the tips rather than the money going straight to the company?
According to one waiter, who didn’t want to be named, the customer is very much in control of the situation.
“If people are worried about leaving tips because they don’t think it will go to the person who served them then they should simply ask for the service charge - which is usually ‘optional’ anyway - to be taken off the bill and then leave a cash tip which should then go straight to the staff.”
Back at Purslane, Gareth Fulford thinks the fairest answer to the confusing issue of tipping starts with staff training.
“Train your staff and motivate them to provide the best level of service they possibly can and leave it to the customer to decide if a gratuity is appropriate.
“You have to make sure the system is as transparent as possible for staff and that the pot is divided fairly.”
And for a small restaurant like Purslane, that end-of-shift pot can certainly be worth sharing out, as Gareth recalls from one recent lunch.
“We had two chaps come in for lunch and they spent pretty much all afternoon with us. They indulged in pretty much the whole menu - oysters, three courses, cheese, petit fours and they had a good crack at the bar, too.
“Their bill came to about £300 and they left a £100 cash tip on top which was a bit of a shock but definitely appreciated by the staff.”
The restaurateur’s view
Ron Faulkner uses a ‘tronc’ system for tips at his award-winning Thornbury restaurant, Ronnie’s, with details laid out in the staff handbook.
Staff are allocated points according to how much their job role contributes and all staff receive a proportion of the ‘tronc’ because Ron says everyone contributes towards service and the running of the restaurant.
“The kitchen porter who ensures the cutlery is separated and clean reduces the time a waiter is required to polish it. The waiter then has more time to spend with the customer ensuring their needs are met.
“The points are multiplied by the number of hours worked, which is then converted into a percentage of the total.
“The total is the sum of all the hours multiplied by the points. Staff are paid their percentage of the monthly ‘tronc’ or ‘tip pot’, which comprises all cash and credit card tips. The banking costs (credit and debit card transaction, money transfers) is incurred by the ‘tronc’.”
Ron says one of the biggest problems in the restaurant industry it that it is so low paid and the hours are so unsocial.
“People in this industry are low paid and they work when everyone else is relaxing. They receive no compensation for choosing to work the unsocial hours.
“Furthermore, customers are empowered by a tax system that allows them not to pay the wages (tips) if they’re not satisfied.
“This would not happen in any other industry and I challenge you to try and not pay an invoice for a professional service when you are not satisfied with the work. It’s normally easier to pay then get caught up in the procedure that follows contesting an invoice.
“Surely an unhappy customer who wishes to contest their bill on whatever grounds, whether it’s service, food quality, ambience or value, should become a management issue, especially in the interest of the business. After all, finding new customers is a very difficult and expensive thing to do.
“The reason we tip is to motivate staff to provide customers with better service, but surely the server should provide excellent service as a minimum standard.
“Another, is the benefits from paying lower taxes. The tronc system should not be handled by the company and therefore is not liable for VAT or National Insurance contributions. But this could be addressed by HMRC by lowering the VAT burden on the restaurant and allowing the business to pay a higher wage.
“I think the fairest way to deal with tips is to have them abolished, add the equivalent service charge to each item, adjust the tax system, and pay the staff a full wage. Leave the burden of implementing standards and maintaining them with the business.
“An increase in sales or other tasks outside of an employee’s standard mandate can be rewarded with a bonus.
“Staff do not benefit from having part of their wages paid as tips. If they wish to raise finance, tips are rarely included when considering their earnings, resulting in borrowing being significantly lower.
“I think tips add a grey area to peoples’ earnings and we live in a modern age. Gone are the days where employees pay for an apprenticeship and we should move towards a more professional industry. Contract of employment should be complete and transparent.”