Tomahawk accused of ‘bullying' staff into paying their own pension and NI

01 March 2021 by

Tomahawk Steakhouse has been accused of "bullying" furloughed staff into paying their own pension and National Insurance contributions by way of a voluntary loan to the company.

GMB Union has said the group, which has 12 sites across the UK, was experiencing short-term cash flow issues.

A statement from the group said: "At no point has Tomahawk Steakhouse suggested that members of staff would be sacked if they did not sign a loan agreement.

"Like the rest of the hospitality industry, we have faced a challenging year, and our priority throughout has been to protect our people and our business. As part of this and in order to survive the coming months, we asked our staff to sign up to a voluntary agreement to help us cover the cost of employer NIC/pension amounts, in the form of a loan. Every single employee chose to sign up to this agreement."

Neil Derrick, GMB regional secretary, said: "This is an outrageous abuse of the furlough scheme and a legal loophole that must be closed. It's never been easier for businesses to access cheap money, yet Tomahawk is bullying its own young, low-paid staff to raise interest-free cash.

"This callous behaviour will leave waiters and waitresses, pot-washers and cooks short of cash and force them to take out interest-rated loans to cover the shortfall or face losing their jobs. Tomahawk needs to take a long hard look at its behaviour – and this legal loophole must be closed before other companies follow suit."

Lucy Lewis, partner at Lewis Silkin law firm, said: "This appears to be trying to work-around the HMRC furlough eligibility condition that all sums are paid to the employee without deduction. Given the broad scope for HMRC review, it is very likely to be seen as going against that criteria (particularly where it is a condition of being accepted for a role), and therefore the risk is that such a move could make the furlough grant repayable. We think it's very unlikely that other businesses will follow, particularly given the negative publicity.

"HMRC is clearly live to this type of issue and has already commented on the support available to employers in financial distress while also encouraging employees to report employers who may be abusing the scheme. A better course of action for employers is, therefore, to seek out the support available rather than put in place schemes which disadvantage their employees and which may amount to an abuse of the Coronavirus Job Retention Scheme (CJRS).

"It is illegal to recover employer NICs on cash earnings from employees so, depending on how the arrangement is structured, this may be another area of enquiry for HMRC."

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