Wagamama signs up to tipping campaign

One of Britain's biggest restaurant chains has joined The Independent 's campaign for fair distribution of tips.

Wagamama, which has 59 restaurants in the UK and 31 franchises worldwide, said it "supports the principle of a fair and transparent distribution of tips and payment of the national minimum wage".

The London-based firm, which posted revenues of more than £70m last year and has more than 2,000 employees, is also preparing to add a line to its bills explaining its tipping policy.

Meanwhile, John Bird, the founder of The Big Issue, announced his support for the campaign, which also has the backing of Pizza Hut, some of the country's biggest chefs, including Marco Pierre White, Jamie Oliver and Gordon Ramsay, and Downing Street.

Mr Bird, who plans to devote his next column to the Fair Tips Fair Pay campaign, said: "For many years it's been apparent to me that one of the most obvious ongoing social injustices is the number of restaurant proprietors who don't pass on customers' generosity to waiting staff. I applaud The Independent and Unite's attempts to empower the thousands of workers who don't have the opportunity to stand up for themselves."

A waitress at Wagamama emailed The Independent last week to complain about the tipping policies used by some of her previous employers, which, she said, gave staff none or little of the 12.5 per cent service charge added to bills.

She went on to call herself "a formerly disgruntled waitress now happily working for Wagamama, who have a really great way of dividing all tips".

In a statement, Wagamama, which does not add a service charge to bills, showed that multimillion-pound restaurant chains can survive while giving staff a fair deal and being up front with customers.

The statement read: "All tips received, whether cash, cheque or credit card, are given to the cashier and at the end of a shift the total is calculated and shared among the employees who have worked on that shift, on a basis agreed by the staff. The tips are then paid via payroll and subject to tax deductions. There is no administration charge." Wagamama, which is majority-owned by Lion Capital, after the private equity firm paid £102.5m for a controlling stake in 2005, distributes tips on top of pay, which, the statement adds, "is always at minimum wage or higher".

Steve Hill, the chief executive of Wagamama, explained the chain's policy: "Our staff work extremely hard for their tips. They are the ones who earn it and agree how it is distributed, and they are the ones who should receive it."

He chose not to comment on the tipping policies used by some of his competitors.

The Independent has revealed that some of the country's biggest restaurant chains, including Café Rouge, Strada and D&D London (formerly Conran Restaurants) use a loophole in minimum wage legislation to top up wages to the £5.52 minimum by using service charges or credit card tips. Tuttons, a London brasserie owned by CG Restaurants, offers staff a basic wage of zero pounds.

Other chains keep a proportion of service charges. Georgetown, a chain of Malaysian restaurants, admitted last week that it takes 100 per cent of service charges added to its bills.

The Independent is calling on the Government to close the loophole in the minimum wage law and for all restaurants to operate a fair, clear and transparent policy for distributing service charges and gratuities to their staff.