May Day for some Unite members will have a special significance this year. It will mark 673 days since the Tory government promised to review the chronic mess that is tipping policy in this country. To end the ‘wage theft’ of monies left for hard working staff by a public that actually believes they will get the ‘service charge’ or ‘tip’ when left on a card payment. In too many cases this is simply used by exploitative employers to pay staff the minimum wage or top up their own profits at the expense of staff.
It is a mess because it is part of a mindless business model adopted across much of the hospitality industry which sees the workers, in a variety of ways, paying for their own employment.
Workers at TGI Friday’s, one of the best-known restaurant chains on the planet, with more than 900 outlets in 60 countries, are just the latest to find their pay packets go short while boardroom profits go up. Earlier this year, with just 48 hours’ notice, waiting staff were told that they would lose 40 percent of the tips they make from customers paying by card in order to pay kitchen staff properly.
A company of TGI’s reputation and scale can afford pay a decent wage to all its staff and Unite is calling for a minimum £10 per hour. A wage that respects its staff and provides dignity in work, addresses growing in work poverty and the abuse of all taxpayers forced to subsidise low pay via a corporate welfare system that sees growing profits at the expense of us all.
One long serving waitress told Unite “Kitchen staff should be paid more, but it should come from TGI Fridays as a wage increase, not from the tips of a minimum waged waitress like me and my colleagues.”
To make matters worse, TGI Fridays’ management has refused to meet with workers or listen to their concerns. They refused to hear a collective grievance signed by workers at over 30 branches back in February. They even rejected an approach by ACAS to settle the dispute. Instead of working with us responsibly to find a fairer solution, TGI simply refuses to consider that it has caused its workers distress and hardship.
Small wonder then that our members have had enough, like so many others across the hospitality sector, including many at McDonald’s who recently walked out in protest at poverty pay. Working in an alliance with workers across the sector, Unite members have been protesting at TGI premises around the capital and now ballots for industrial action are underway.
But back to that business model. The hospitality sector is well known for the influence of private equity in its operations. TGI UK is no different: equity firm Electra has a 78 per cent stake in the business. And where private equity is found, hammering down staff costs and cutting wages is never far behind. Hospitality is also a business that has grown fat on a policy of using tips to subsidise kitchen staff wages, which don’t keep pace with increases in the national living wage while waiters’ wages have. The result is, unsurprisingly, severe staff shortages in the kitchens with 15 per cent of back of house jobs vacancies unfilled and a turnover that is 22 per cent higher than the total workforce.
But instead of fixing this by paying kitchen staff a wage they can live on without a tips top up, TGI opted to rob Peter to pay Paul. The pity is that TGI Fridays was once a pretty good employer in a sector not known for them. In fact it was one of the first to sign up to the Unite and Mirror newspaper Fair Tips Charter back in 2009. But in recent years it has steadily chipped away at workers’ benefits and perks. Last year, a new contract was imposed that removed their overtime premiums and other benefits.
In March, it was publicly shamed for failing to pay 2,302 workers the national minimum wage and was forcing workers to pay for their own shoes as part of their uniform. Unite has also revealed that TGI has been using unpaid ‘trial shifts’ of up to six hours long, exploiting yet another loop hole in legislation.
Bringing trade unionism to hospitality
Worker exploitation has become hard-baked into the hospitality industry. Remember the revelation earlier this year that one Bristol chain was making staff pay to work? Or when Wagamama blamed the threat to discipline staff who call in sick on a rogue local manager? And when we exposed businesses at the Edinburgh fringe for using unpaid staff?
This is why for Unite it is so vital that we bring strong trade unionism to this sector. It is huge – between them, hotels and restaurants employ over two million people in the UK – and is an entry into work for many young people. It’s essential for us to ensure that they know that they do have a union to turn to, that exploitation is not part and parcel of the workplace.
And it is why we are so proud of those young people at TGI, Premier Inn, McDonalds and others across the industry who are saying that they have had enough and are standing up for better treatment. Working together with the Bakers, Food and Allied Workers’ Union (BFAWU) we have struck an alliance to end poverty pay and bring justice, respect and dignity to the sector.
So, the action by the TGI waiting staff is about much more than a change in tip policy. It’s about standing up to employer that think they can get away with bulldozing through changes unchallenged. It’s about challenging a rotten system built on low pay and exploitation. And it is about reminding this lousy government that with or without them stepping up in support of some of the lowest paid workers in our nation and ending the practice once and for all, we will collectively organise, support, inspire and give the confidence to workers to win it for ourselves. That’s our job, our cause as trade unionists.
The TGI ballot doesn’t just send a signal to waiting staff across the country. It also tells hotel workers, cleaners and bar staff, and all workers fed up with bosses getting away with it, that they deserve to be treated decently – and that there is a welcome home for them in our labour movement.
- This comment first appeared today (May 1) in the Morning Star.