Harrods restaurant workers win battle to receive 100 per cent of service charge

Union leader hails 'landmark victory' but says more needs to be done to ensure low-paid workers aren't left out of pocket

Protesters made their feelings known outside Harrods earlier this month (Matthew Chattle/REX)

Harrods restaurant staff have won a battle with bosses and will now receive 100 per cent of the service charge after the company backed down.

In a meeting this morning, 483 affected kitchen and waiting staff were told the Qatari-owned store will no longer take a cut of the service charge added to diners’ bills.

Bosses previously admitted keeping around 50 per cent of the discretionary charge – although the union representing the workers believed the real figure was closer to 75 per cent at £2.5 million a year.

Campaigners and members of the United Voices of the World Union (UVW) protested outside the upmarket Knightsbridge store earlier this month to make customers aware of the situation.

From April, the company will reduce the service charge from 12.5 to 10 per cent of the bill – but it will all be passed onto the restaurant staff.

Petros Elia, the general secretary of UVW, welcomed the “landmark” victory - but said he did not believe Harrods backed down out of genuine goodwill, but rather to avoid public embarrassment.

He said: “It’s a landmark victory in many respects with Harrods being the richest and most prestigious department store in the world.

“For the individual workers, it’s important because they are going to be up to £500 a year better off – which is significant when they are being paid poverty wages because many of the workers we were representing are paid below the London living wage.

“Harrods have succumbed to public pressure from staff and workers and also from the media. It has nothing to do with goodwill – they rejected the claim out of hand when they were first approached.”

He said he thought Harrods had taken action to avert “any disruptive and embarrassing strike action” following a demonstration earlier this month.

Mr Elia said he did not believe customers who dine in the upmarket restaurant would have known where the service charge was going.

“I don’t think anybody knew the tips were being effectively stolen by the company before we ran our campaign.

“It shows what can be achieved when workers band together and dispels myths about the dying role of trade unions.”

Mr Elia added he would like to see legislation around the distribution of service charges entirely to workers.

The only existing law says that it cannot be used to make up a worker’s salary to the minimum wage.

The Independent campaigned to end the practice of restaurants creaming off tips to make up the shortfall in the minimum wage in 2008.

A former Harrods waitress, who did not wish to be named, told The Independent the practice of the restaurant keeping a proportion of the service charge dated back to at least 2011.

"It was an awful place to work," she said. "Putting a 'discretionary' service charge on stopped customers giving us cash tips, and we knew we weren't getting anywhere near the full 12.5 per cent.

"The restaurant was always full of stressed, angry shoppers, and we were often treated terribly by both customers and managers. Knowing we wouldn't even get the full tips was insult to injury really."

Harrods said in a statement that it had amended its practice following “direct engagement with employees”.

It said in a statement: “As well as providing a fair arrangement for employees, Harrods wants to ensure that customers are presented with a transparent, reduced service charge, allowing them more discretion in the amount they would like to contribute.

“The decision aims to be in line with recent Government consultation objectives on service charge, which encourage transparency for both employees and customers, while rewarding employees for the service they provide.”

Pre-tax profits for Harrods rose by 19 per cent to £168 million in the year to January 2016, with its highest paid director earning £1.6million, according to accounts filed at Companies House.

Other restaurants have come under pressure over the distribution of services charges, including department store Fortnum and Mason and Michelin-starred restaurant Le Gavroche, while several chains have been criticised for keeping tips made by credit card.