An employer has lost a tribunal appeal to allow
tips to be included as part of the National Minimum Wage (NMW). An
employment tribunal judge made the decision in the case between
Annabel’s restaurant and HMRC.
Annabel’s used tips received through a ‘tronc’ payment
as part of the NMW. A ‘tronc’ is an independent
distribution system that allows tips, gratuities and service
charges that are paid directly to the establishment be allocated
to the various members of staff. The ‘tronc’ scheme
bypasses the employer, so that any monies paid to an employee
are not seen as being payments from them. It is on these
grounds that HMRC argued that the tips should not be seen as
contributory to the NMW.
HMRC are committed to ensuring every worker in the country gets
a fair and legitimate wage, with hefty penalties for non-compliance
with National Minimum Wage legislation.
