Restaurant bosses deny service charges are a 'con job'
RESTAURANT owners have been accused of stealing tips from staff and using service charges as a "con job".
Representatives of the Irish Hotels Federation (IHF) and the Restaurants Association of Ireland (RAI) yesterday told the Oireachtas Employment Affairs Committee that service charges added to meal bills are not tips and could correctly be used to defray wage costs.
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A row last year between management and staff at the Ivy Restaurant in Dublin catapulted into the news headlines the question of who gets to share tips and service charges, and the differences - if any - between the two.
Industry representatives and trade unions were questioned on the issue by TDs and senators yesterday.
The IHF and RAI voiced support for a proposed Government bill that would explicitly outlaw the use by operators of tips to cover wage costs.
An alternative bill by Sinn Féin would extend that ban to service charges - and would punish owners with fines of €2,500 and six months in prison if tips were not handed directly to staff.
"One hospitality worker who does not get their tips is one too many," said RAI chief Adrian Cummins.
The Government bill would "stamp out the bad behaviour of a few and renew public confidence in the many", he said.
A draft of the Government proposal draws a "welcome distinction between tips and service charges", Mr Cummins said.
Service charges were not tips, he said.
He welcomed a proposal that all outlets would post their policy on tips and service charges in a public place.
IHF chief executive Tim Fenn said restaurant owners "may decide to add a service charge based on the service they provide. That's their business. They get to decide what to do with it".
RAI public affairs manager Amy Sweetman said Ireland's competition laws make service charges "solely a matter for the business".
Committee members said the addition of service charges on bills misled customers into thinking they already were tipping the waiting staff.
"Isn't the service charge a complete con job?" asked Sinn Féin senator Paul Gavan.
"Nobody's going to leave a cash tip on top of a 12.5pc charge, because they assume the service charge is going to the worker," said Independents 4 Change TD Joan Collins.
Independent senator Alice Mary Higgins said she had asked members of the public at random what a service charge was: "Every single one of them said, 'a tip'."
Mr Fenn said even tips added to a bill using a debit or credit card increased tax and other obligations for restaurant owners. He said tipping directly with cash is "the best way for it to be handled, full stop".
Unite official Richie Browne said unions would oppose the Government's plans because they "do not provide a criminal sanction for bad employers who steal from employees".