Harrods faces legal action over £1-a-head dining charge not going to staff

Harrods is facing legal action from 29 restaurant workers, backed by the UVW union, over a £1-a-head cover charge added to diners' bills. The workers argue that this charge functions as a service charge and should be distributed to staff, in accordance with the Employment (Allocation of Tips) Act 2023, which requires businesses to allocate all tips, gratuities, and service charges fairly to workers. The employment tribunal case, scheduled for September, will test whether the cover charge qualifies as a tip under the new legislation. Harrods distributes the optional 12.5% service charge to workers but retains the mandatory cover charge, a practice workers claim is discretionary and therefore functions as a tip. The outcome of this case could impact other restaurants, such as The Ivy and The Wolseley, that also levy cover charges.

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