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Why a Strike at TGI Friday's Is a Big Deal for Britain's Pissed Off Hospitality Workers

Here's a "tip" for the bosses – pay your workers fairly!

by Matt Cole
18 May 2018, 7:00am

Screengrab from Office Space

Workers at TGI Friday's, America's most over-enthusiastic casual dining export, are set to strike today over wage cuts and control over their tips. So far, the Milton Keynes, Manchester Trafford Centre, Leicester Square and Covent Garden branches have returned a unanimous ballot in favour of strike action. There are two further industrial action ballots at Enfield, Greater London and Gateshead Metro, Newcastle due today, meaning that staff at all six restaurants will likely be on strike from Friday the 1st of June.

Why are they striking? And what does this strike represent for the UK more broadly? I spoke to a few TGI workers and union activists to find out.

Workers are striking because 40 percent of front of house tips have been diverted by management in order to supplement wages for underpaid kitchen staff. For full-time waiters, who are paid the national minimum wage, this is equivalent to a pay cut of up to £250 per month. They were given four days' notice and a month to make financial arrangements for their losses, which management put in scare quotes, as if £250 is chump change. According to the London Poverty Profile, 58 percent of Londoners in poverty are actually in a working household. This proportion is "an all-time high". For hospitality workers in these circumstances, the reductions in pay from service charges and tips can have catastrophic consequences. As a TGI Friday's worker – who asked to be quoted anonymously, for fear of repercussions at work – put it, "It is not as though I ended every week with money to spare. Travel costs have gone up, food costs have gone up, utilities have increased, but my income has not."

It may seem like waiting staff are being greedy, denying chefs and other back-of-house workers a pay rise, but it’s more complicated than that: "No one thinks the kitchen shouldn’t be paid more," says the anonymous worker. "But a company that makes £18 million in profit and thinks we waiters can afford to take a 10 to 15 percent cut in our take home to fund a pay rise to retain chefs they've been underpaying is taking the piss." Management have decided that, rather than raise the hourly wages of the chefs, who have some of the toughest conditions and hours in the industry, simply throwing them some extra tips would suffice.

The money these managers are diverting to chefs is tax-free, because that’s what the complex rules about how companies distribute tips to workers allow for. If the employer meets certain conditions, then service charges, tips and other gratuities paid by customers and distributed to staff are free of National Insurance Contributions (NICs), which could save employers nearly 26 percent in tax. One of these conditions is that the "troncmaster" – the manager who distributes the tips – must be independent from the employer and be identified to HMRC as the person responsible for PAYE. Yet, there is virtually no oversight or enforcement of such rules, which allows employers to manipulate it to their advantage.

Trevor Peach, TGI's Director of Operations, a senior management position, is the troncmaster for the company. It would be a bit of a stretch to view Trevor as "independent" in any sense from the employer. Peach claims to have consulted workers on the decision to reorganise the tronc, but workers claim they were not consulted and have filed a grievance against TGI based on this. Either way, the workers have vocally protested against their service charges and tips being taken and controlled by management. And yet the bottom of every TGI Friday's bill still reads "Only Great Service deserves a tip. We’ll leave that up to you. All our team keep all their tips" – which is disingenuous at the very least. The term tronc derives from the French "tronc des pauvres", referring to the alms box that used to be found in churches; managers are effectively robbing the alms box meant for one group of underpaid staff for the company shareholders' benefit.

This alleged wage theft is strangely consistent with TGI Friday's record of failing to pay workers the legal minimum wage. The low pay commission found that they owed 2,302 of their staff £59,348 in unpaid wages. This is part of a broader phenomenon in Britain of employers systematically not paying workers what they are owed. A recent report by Nick Clark and Eva Herman of Middlesex University analysed employment tribunal judgment data, Labour Force and Family Resource surveys, case studies and interviews to reveal that at least 2 million workers in Britain are losing over £3 billion in unpaid holiday pay and wages a year.

Hospitality workers represent a major part of these losses. Unlike in the past, hospitality isn’t some peripheral section of the economy. As of 2016, the wider hospitality industry accounted for 3.2 million jobs or nearly 10 percent of the entire UK workforce, making hospitality the fourth largest industry by employment. The industry has grown at a faster rate than any other sector since the economic downturn. At the same time, the industry continues to have the highest incidence of low-paid workers, at 61 percent. The growth of the industry combined with its low wages represents a broader polarisation that has accelerated since the financial crisis.

The TGI strike represents a potential turning point for workers, and it is not a singular event: union membership and militancy in hotels and restaurants across the country is increasing. UNITE, for example, has recently seen a 200 to 300 percent rise in its hotel and restaurant workers membership. There are hundreds of dues-paying activists working at TGI Friday's, Pizza Express, Byron and other restaurant chains. In this context, it seems that hospitality workers might have finally had enough of the shitty pay and conditions. Charlotte Bence, a UNITE hospitality organiser, said, "This is the first strike in a casual dining chain for decades – and where these workers lead, others will follow. The activists leading this are young women and migrant workers, exactly the people we need more of in the UK trade union movement."

It seems ironic, and yet appropriate, that a restaurant chain whose saccharine motto is "In here it's always Friday" would be the focal point of such a strike. The idea of a place where Friday never ends is a sort of a metonymy for all hospitality work: the production of positive, "authentic" experiences. This Sisyphean task should be properly remunerated. Hospitality workers deserve a living wage, and the dignity and security that comes with it. If you agree, show your solidarity at the London picket line on Friday.

@MattColeWorks