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[tedblight]

Hi,

My partners work place has gone into Administration, its a Hotel & Restaurant...
Normaly the tips from the restaurant are shared out monthy between all the staff as a bonus.

Since been in Administration, the tips have stopped. The Administrators say that tips are illegal and that they are claming them all for themselfs....

Are they allowed to do this???

Thanks in advance!

[alwaysonthego]

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[dacouch]

http://www.berr.gov.uk/files/file52948.pdf

[Sparhawke]

I always understood that tips were an appreciation of the work done by the actual staff, the cooks, waiters and kitchen staff and should be carried out by those actually doing the work, not to be taken by someone at the top so they can buy the bubbly for the Christmas party but it has been some years since I worked in this industry...so don't know whether it has been changed.

Best thing to do in that situation is to probably come up with a plan with all the actual workers to find a way of getting tips themselves and figure out a way to divide without letting administrators get their hands on it.

In the link given above it simply has guidelines which are not set in law, beyond the fact that tips should not be a substitute for actual wages, tips are to be on top as a bonus from the customer to the worker as a perk of good service. They are not to be used to finance admin costs, though if no one questions it companies will get away with it.

Anyways, to cut a long story short, the administrators are telling porkies...tips are not illegal and never have been though there are some questions as to whether they are taxable.

(See page 8 of that link that clearly states that about 70% of all service charges should go to staff, and ALL cash tips should go to the workers)

Further information can be sought at page 10 with a handy telephone number

[tedblight]

Hi,

That link helps a lot. Thanks.
But it doesn't clear up my main issue which is 'Do the Adminstatiors have a right to keep the tips...'
As the company is not making money and they have to 'claw' back any money coming into the buissness.

[Wine of the World]

Does it say anything in your partner's contract regarding tips. When I worked as a waitress (not for long) in stated in our contract that tips wold be divided equally buy all waiters / kitchen staff etc. I think if there is something in the contract about where the tips go then the administrators cant just decide to change it.

Also, is there anything on the menu about tipping? Because if its ALL going to the company couldn't that be fraud? I know when I leave a tip I am not intending to overpay but to tip for good service.

[DVardysShadow]

Staff should ask punters whether the tips are intended for staff or for administrators. That will settle the matter. As a punter, I would only pay a tip to staff.

[Any]

I think it is very odd for the administrators to take the tips.. unless it is service charge already pre-added to a bill?

I searched on directgov website and others, but it is unclear. It only mentions who sorts out the tax on tips (you if given to you, employer if service charge is part of the bill). I would check your contract of employment and whether there is anything mentioned in it about tips.

[Zozo1985]

Surely tips aren't illegal or why would all restaurants etc let it happen. In my oppinion the tips aren't the property of the company but the staff therefore the administrators should have no right to take them as they are not the companys.

[TEDDYRUKSPIN]

Tips are not illegal and not mandatory either. All tips are considered part of the profit made and companies do not have to distribute them back to the people. Strange but true.

Now you know why so many people hate giving tips and ask if they go direct to the person in question.

[Bobl]

Tips are part of the income of the business, and do not have to be paid out to the staff. A friend of mine owns a hotel and they take out the cost for all breakages/damage each month before giving the rest out to the staff, which by the way is a taxable benefit.

Staff members who take tips from customer and do not give them to the hotel can be sacked for theft.

Not many people understand that, and I am sure most people think they are giving a tip to the person who served them; but then that would be unfair on the Chef's etc.

So in answer to the original question; yes it is right for the administrators to retain the tips. Their job is to pay off all of the creditors before anything else.

[Anihilator]

As per Rukspin tips are not illegal although there are possible repercussions of a firm in administration distributing them.

Unless your contract states they are yours to keep the company is entitled to do what they wish with them. Asking customers won't get round this and may actually lead to discliplinary action.

If the company is in administration then the administrator has a legal obligation to protect and maximise the creditors position hence distributing tips they don't need to by contract would be a possible breach of this duty.

[Sparhawke]

Originally Posted by tedblight

Hi,

That link helps a lot. Thanks.
But it doesn't clear up my main issue which is 'Do the Adminstatiors have a right to keep the tips...'
As the company is not making money and they have to 'claw' back any money coming into the buissness.

Depending on your definition of "tips" that are purely cash handed over and kept in a jar then no, they have no legal right to it at all...they are for the staff only.

If you mean "gratuity" or "service charge" tacked onto the bottom of a check then no, legally they are only expected to take about 10% for admin costs of actually sorting it out, 20% to cover various breakages of equipment and the majority slice of 70% going straight to the staff right at the end...

Since the restaurant are in receivership anyway what are they planning to do with this money? pocket it themselves? If so, that is tantamount to stealing.

People pay this gratuity expecting it to go to the staff, if they found out it was going straight to the admins to line their own pockets do you think they would be happy? Simply put, you do not even have to pay this service charge, it is just put there on the end to gaurantee the staff get something on top in most places...there is nothing to stop the waiters from placing a "cash" tips jar on the table and telling their covers why it is there. (Because it then goes straight to them instead of the bean counters)

This is what I did when I was working in a restaurant, much to the consternation of everyone else, I even laminated some cards explaining what was going on...my tips rose 60% in that time...

I personally feel that service charges are wrong anyway, they breed laziness, if a waiter knows he has to work for his tips he will go out of his way to be great, if he doesnt even have to bother what is the incentive?

[Bobl]

Just found this:

Unlike discretionary service charges and credit card tips, cash tips do not belong to the business or the owner of the restaurant. They belong to the member of staff to whom they have been given. If a box or a dish is used, then they belong to employees as a group, but again not to the business or owner.

However if the tips were 'Service Charge' then the Administrators are right, the business is in administration, therefore all monies must firstly be used to pay debts (i.e suppliers etc).

[Sparhawke]

Here is an idea from me to you though, if there are other jobs around calling for staff then go there, why would you want to work in a company that is sinking and is taking what rightfully belongs to you?

Organise a meeting, select a leader and tell them to go tell the administrators in no uncertain terms that if those gratuities are not put back in their rightful place you are walking...and then do it, from the sound of things you ill be out of a job soon anyways so what are you waiting for? lol

Originally Posted by Bobl

Sparhawke is wrong; all tips including cash must be declared, it is illegal to pocket tips as they are a taxable benefit.

The business is not keeping this money for itself, it is in administration, therefore all monies must firstly be used to pay debts (i.e suppliers etc).

Actually, Sparhawke is not wrong...as stated in my earlier post ( right here ) there is some question as to whether tips should be declared, that has never been established fully.

Try reading the whole thread properly.

And the definition of "pocketing" means to take the tips for themselves, whether they choose to declare them or not is the waiters business, not yours, not mine, certainly not the administators...it is the individuals own responsibility to get their tax sorted properly.

[Any]

http://www.vantisplc.com/Vantis/News...demployees.htm

Look what I found....

Unlike discretionary service charges and credit card tips, cash tips do not belong to the business or the owner of the restaurant. They belong to the member of staff to whom they have been given. If a box or a dish is used, then they belong to employees as a group, but again not to the business or owner.

[Anihilator]

Originally Posted by Sparhawke

Here is an idea from me to you though, if there are other jobs around calling for staff then go there, why would you want to work in a company that is sinking and is taking what rightfully belongs to you?

Organise a meeting, select a leader and tell them to go tell the administrators in no uncertain terms that if those gratuities are not put back in their rightful place you are walking...and then do it, from the sound of things you ill be out of a job soon anyways so what are you waiting for? lol



Actually, Sparhawke is not wrong...as stated in my earlier post there is some question as to whether tips should be declared, that has never been established.

Try reading the whole thread properly.

I suggest you stop giving out completely false information.

1) Staff have no legal obligation to tips or gratuities or service charges unless its a contractual benefit. If it isnt the organisation can do what they want with them. If staff take them anyway it is theft. Also to add it is against the legal obligations of an administrator to gift assets away at the cost of the creditors

2) If staff walk they lose all rights to any sort of redundancy. The administrator will be estatic at the staff walking as they can replace them with cheaper options without the same employment rights

3) Tips must always be declared as income. Yes most don't and most get away with it but it doesnt make it legal.

You don't have a clue what your talking about and people like you are dangerous

[dzug1]

Originally Posted by Sparhawke

Since the restaurant are in receivership anyway what are they planning to do with this money? pocket it themselves? If so, that is tantamount to stealing.

Of course they are not planning to 'pocket it themselves'. They ARE the receivers and will use it to pay the restaurant's bills. Which may in part include wages.

They are not administration staff of the restaurant - they are admininistrators employed by the receiver to sort things out.

Whether the money is theirs (ie the restaurant's) to take is another matter and doesn't seem to be clear cut.

[Any]

Originally Posted by dzug1

Of course they are not planning to 'pocket it themselves'. They ARE the receivers and will use it to pay the restaurant's bills. Which may in part include wages.

They are not administration staff of the restaurant - they are admininistrators employed by the receiver to sort things out.

Whether the money is theirs (ie the restaurant's) to take is another matter and doesn't seem to be clear cut.

According to the link I enclosed, it seems that the cash tips belong to the employees.
Therefore the administrators have no right to take them. Doesn't matter who are they going to pay out of them, they do not belong to them so they cannot distribute them to suppliers or anyone.

[Anihilator]

Originally Posted by Any

According to the link I enclosed, it seems that the cash tips belong to the employees.
Therefore the administrators have no right to take them. Doesn't matter who are they going to pay out of them, they do not belong to them so they cannot distribute them to suppliers or anyone.

That link is extremely lacking of any legal evidence to back up its opinion.