HMRC Wins Minimum Wage Court Battle

Bar and restaurant workers have today been given a helping hand by the Court of Appeal in their fight for fair pay.

The court ruled in HM Revenue & Customs' favour by upholding current national minimum wage legislation relating to tips, gratuities and discretionary service charges in the case of Annabel's restaurant and night club and others.

The judgment confirmed that employers must pay their staff at least the national minimum wage regardless of any tips, gratuities, service charges or cover charges, providing they are not paid by the employer to workers through the employer's payroll. This means that Annabel's and others must now pay over £125,000 in arrears to its workers.

HMRC had argued that payment via a 'tronc' (an independent distribution scheme) does not count towards the national minimum wage.

The Court determined that where restaurant or bar service charges are paid by the customer to the employer, but are then paid into a 'troncmaster's' bank account for distribution in accordance with a 'tronc' scheme agreed between the troncmaster and workers, the sums distributed to workers are not "paid by the employer" and so cannot be included in national minimum wage pay.

Rt Hon Stephen Timms, Financial Secretary to the Treasury said: "The Government's priority is to ensure that all workers are paid at least the national minimum wage.

"I am extremely pleased that the court has recognised HMRC's commitment to ensuring that tips are correctly and fairly distributed to the people who earn them. This is good news for bar and restaurant workers across the UK."

HMRC vigorously enforces the minimum wage across all employment sectors including the catering and hospitality industry. Anyone who thinks they are not being paid national minimum wage rates should contact the confidential NMW Helpline on 0845 6000 678.


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