French-style restaurant group Côte has been criticised for allegedly "misleading" customers by taking the 12.5% service charge instead of giving it to staff.
The 72-strong company has been accused of "pocketing" the standard 12.5% service charge, without making it clear that this "tip" would not go directly to the waiting staff on the restaurant floor, reported today's London Evening Standard.
A source claiming to be a current Côte staff member told the Standard that if customers asked what happened to their tips, waiters were instructed to say that the charge was shared out among them. Instead, Côte is alleged to be taking the entire service charge. Under current laws, there is no legal requirement for a restaurant to allocate a particular proportion of the service charge or tip income to employees.
Côte has hit back at the criticism, saying that its policy allows it to pay £7.50-8 an hour, which is significantly more than the national minimum wage of £6.50 for staff aged over 21. It is, however, still less than the London Living Wage of £9.15 (Côte has 30 London sites). It also said that staff can choose whether to keep any cash tips left on the table, a claim that has also been disputed by the Standard's source.
The source continued: "We are told by management that we don't get to keep the service charge because we get paid more than the minimum wage, so we should be grateful, but most of us would prefer earning the minimum wage and taking home our tips for the hard work we do." The staff member also disputed that they were at liberty to keep cash tips left on the table.
At the time of writing, The Caterer was still awaiting comment from Côte. However in a statement to the Standard, the business said: "At Cote the optional service charge is used to increase the pay of all restaurant level staff above what would typically be seen as market standard. Whereas the base salary for a waitress in the industry would typically be minimum wage, currently £6.50 per hour, we are able to pay more like £7.50-8.00 per hour through using the service charge.
"This applies to all restaurant level staff, as good service is a team effort from the person serving the food to the person cooking the food or cleaning the kitchen."
Founded in 2007 by Andy Bassadone and Chris Benians, with funding from Richard Caring, Côte was sold in September 2013 for £100m to private equity firm CBPE, and then sold to another equity firm, BC Partners, for a reported £250m in July this year.
It reported a 30% rise in turnover in its financial year to July 2013, and has experienced a recent period of strong growth, opening over 30 locations in the past two years.
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