Ivy Collection employees are unhappy after the company slashed their portion of the service charge paid by diners.
The cuts came into effect in April when the legal minimum wage increased.
The restaurant chain operates nearly 40 establishments across the UK and Ireland.
It pays waiters, chefs, certain managers, and support staff the legal minimum wage of £10.42 for people aged over 23.
They are also paid an hourly “commission” rate linked to their position and location.
Under the current system, workers receive the same hourly commission regardless of the total service charge collected during working hours.
However, cash tips provided by diners separately, as well as those made via credit card, are allocated differently.
Some Ivy staff argue adjusting their service charge allocation in April nullified any benefit they should have gained from the minimum wage increase.
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These changes occurred while the restaurant business, controlled by billionaire restaurateur and fashion tycoon Richard Caring through his Troia (UK) Restaurants group, raised its menu prices.
The chain’s pay system will likely be altered next year, where waiting and kitchen staff potentially receive less than half of the service charge.
New legislation requires operators to pay their staff 100 percent of their tips, including the service charge.
While the government is set to consult on a code of practice to ensure fair and transparent allocation of service charges and tips, workers remain concerned about the current situation.
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Troia (UK) Restaurants Ltd, where Caring owns a stake ranging from 50 to 75 percent, said: “Every single member of our staff is guaranteed to be paid above the national minimum wage and all cash or credit card tips are kept directly by the member or members of the team who received the tip.”
However, workers claim their commission was reduced significantly in April, with some experiencing cuts of more than 90p an hour.
The lack of transparency surrounding the Ivy group’s service charge allocation has left employees uninformed about the cuts to their share.
Workers only discovered the changes after questioning their managers about the lack of pay increase following the minimum wage hike.
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The restaurant chain employs a “tronc” system, involving a committee of staff members responsible for deciding how the service charge is distributed, in collaboration with a “troncmaster.”
But its staff claim to have no means of contacting the committee or accessing information regarding sharing the service charge pool.
The reduction in their share of the service charge has placed an additional burden on workers already struggling to cope with rising rents and stagnant wages.
Some employees have chosen to leave Ivy due to financial constraints, with one worker citing an inability to afford their mortgage payments.
The shift towards card payments during the pandemic has also led to a decline in cash tips, exacerbating staff members’ financial strain.
