Employment law
News: Tips can no longer count towards to national Minimum Wage
- Date: 04/07/2008
- Author/Solicitor: Nick Arron
The High Court decision followed an appeal by Her Majesty's Revenue & Customs against the decision of an employment tribunal in a case involving Annabel's Nightclub and Restaurant in London.
Annabel's collected tips centrally on behalf of its employees. They were then distributed by the troncmaster. At Annabel's there were two separate payrolls, one for basic pay which was administered by the employer and the other, the accumulated tips, administered by the troncmaster. The tips distributed in the troncmasters' payroll topped up the basic pay to the National Minimum Wage (NMW).
Annabel's had argued that pooled tips can count towards the NMW because the money was paid to the staff by the company and not the customers. The appeal court disagreed and held that the money from the tronc was not the employers' property and could not count towards the NMW.
The decision changes the previous practise where pooled tips could count towards the NMW.
The implications for Annabel's are huge as they were topping up staff pay to the NMW using pooled tips between 1999 and 2003. There is an estimated six figure claim.
For more information please contact Nick Arron .