Dim sum group Ping Pong has come under fire for introducing a 15% “brand fee” to replace tips – a move seen as circumventing a new law coming into force this summer that forces restaurants to give service charges to staff.
Ping Pong, which operates five outlets across London, most notably beside the Festival Hall on the South Bank, insists it is giving staff a pay rise to compensate for the lack of tips.
The Employment (Allocation of Tips) Act comes into force in July, with the government predicting that 2 million employees will benefit to the tune of £200million between them.
Art Sagiryan, Ping Pong’s chief executive, says the government has “completely ignored the huge costs that are related to operating” the new system. “Everyone in the industry is waiting to see who does what. There will be people introducing cover charges, there will be people introducing higher bills or menu prices, and we in the interim are trying to decide where we will go.”
Ping Pong says it will gather customer feedback on the new charge – to cover “franchise fees and other brand-related expenditure” – which is automatically added to the bill. Diners can opt out of paying it, but they can no longer add a traditional tip via electronic payments. The alternative, which the brand said it would also consider, is to increase product prices.
Bryan Simpson, the organiser for hospitality at the Unite union, says that offering just £1 above the minimum wage to replace “a healthy per hour tip rate” was “a complete slap in the face” for staff. “Ping Pong’s decision to effectively deny workers tips by cynically changing the service charge to a ‘brand charge’ in order to circumvent the new fair tips legislation is one of the most blatant examples of tips theft that we’ve come across as the union for restaurant and bar workers.”
Restaurant-goers who wish to recognise good service may opt to carry cash and tip directly – although this may mean only floor and bar staff benefit, leaving the kitchen brigade and other behind-the-scenes workers out of the equation.
