Staff at top London restaurants consider legal action over cover charges ‘that do not go to workers’

23 December 2024, 09:28 | Updated: 23 December 2024, 09:54

Workers at several upmarket London restaurants are considering legal action against the owners over cover charges added to diners’ bills that they claim do not go towards staff.

Legislation introduced in October requires business owners to give all tips and service charges to employees but several restaurants have introduced an additional cover charge, which they do not pass on to their workers.

Staff at the Savoy Grill, the Ivy and the Wolseley are among those considering action while some workers at Harrods went on strike this weekend over pay and conditions, including the £1 cover charge levied in its restaurants.

Employees at the luxury department store have the backing of the United Voices of the World (UVW) as they seek an employment tribunal over the handling of the levy.

Alice Howick, a member of Harrods waiting staff and a UVW member, said: “We are arguing that the cover charge is a kind of service charge in that it is an extra amount added to the customer’s bill before it is presented to the customer.

“At the moment, all the revenue made from the cover charge is going directly to the company, but we believe it should be going to the employees.

“We have serious concerns that our service charge, which makes up a considerable portion of our income, will be affected in the long term.”

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Bryan Simpson, the lead organiser for the hospitality sector at the Unite union, said it was also considering legal action over any “immoral” cover charges.

He said the union was working with the Department for Business and Trade to close any potential loopholes.

Simpson said: “Unite is quite clear that cover charges are tips for the purposes of the Employment (Allocation of Tips) Act and that any attempts made by employers to hoodwink customers by simply renaming what is ostensibly a service charge would be immoral if not illegal.

“Following multiple reports from Unite members in fine dining that some of the most prestigious brands in the country are using ‘cover charges’ to divert money intended for workers towards improving their own profit margins, we are currently considering legal action against the companies involved.”

The Wolseley on London’s Piccadilly levies a £2.50 cover charge on top of its 15% service charge while its sister restaurant, the Delaunay, asks for a £2 cover charge.

The company says both restaurants have levied a cover charge since they opened.

Richard Caring’s restaurants, including the Ivy in Soho, adds a £2-a-person levy on top of its service charges. The restaurants said the charges had not been introduced recently.

The Savoy Grill, run by Gordon Ramsay, also adds a £2-per-person cover charge but also said a cover charge had been in place since it opened.

The new law change in October means all tips and service charges must be passed on to the staff who earned them, rather than being retained by employers.

This applies to all tips, gratuities and service charges paid by customers, in whatever way they are described.

Employers could be ordered to pay compensation of up to £5,000 per person over breaches of the legislation.