Court rules against waiters over tips

Restaurant and other service workers who need to boost their low basic pay with tips have been dealt a bitter blow by the courts.

A ruling from the European Court of Human Rights (ECHR) has confirmed an earlier House of Lords judgement allowing employers to keep tips intended for their staff or to use them to pay basic wages.

The ECHR ruled that tips paid through credit cards or by cheque remain the property of the employer to dispose of at will. This means that employers can use money collected in service charges to pay the minimum wage to their staff. The fact that the customer intends that the money should go directly to the staff is irrelevant according to the court.

Four waiters, Sandro Nerva, Jose Pulleiro, Jose Gigirey-Cabo and Julio Rodriguez sued their employer, a London restaurant Paridiso e Inferno because the restaurant pocketed their tips claiming that they belonged to the restaurant and not the workers.

The consequences of this ruling are serious. They mean that a "service charge" is not a tip to the employee for good service but a subsidy to the employer towards the wage bill . In effect the better the service the employee provides and as a consequence the larger the tip paid by the customer, the cheaper the worker is to the employer.