Case brought by 29 workers and backed by UVW union seen as test case that could lead to changes at other restaurants
Harrods is facing legal action over its addition of a £1-a-head cover charge to diners’ bills that does not go to workers, in a test case that could lead to changes at a string of upmarket restaurants.
Legislation, which came into force in October 2024, requires business owners to hand over all tips and service charges to staff. Some restaurants, including those at Harrods, add a mandatory cover charge as well as an optional service charge and only pass on the latter to their workers.
An employment tribunal case involving 29 Harrods restaurant workers backed by the United Voices of the World (UVW) union is to be heard in September. Workers argue that the cover charge functions in practice as a service charge and so should be distributed to them and not kept by Harrods.
It is the first legal challenge in the UK to test what qualifies as a tip under the Employment (Allocation of Tips) Act 2023. Under the legislation, restaurants, cafes and hotels must ensure all tips, gratuities and service charges paid by customers are allocated fairly to workers in that place of work.
