The Ivy faces legal action from a waiter who claims he was refused details about how the upmarket restaurant chain calculated his share of tips and service charges, despite a new law aimed at ensuring they are shared more fairly and transparently.
The waiter, who asked not to be identified, quit the Ivy in June, claiming that he had been given an “totally unfair” share of tips and service charges, and is claiming constructive dismissal against the Ivy’s owner at an employment tribunal.
The Ivy said it “absolutely refute[s]” the waiter’s allegations and will challenge them at the tribunal.
The case could shine a light on how diners’ gifts are shared out at the Ivy, which is owned by the tycoon Richard Caring. It could also clarify what level of detail businesses should provide to their workers on the allocation of service charges, such as how their share compares with others’ and how their allocation was decided.
The waiter, who worked part-time, claims he was allocated £46.34 in gratuities and service charges for 43 hours’ work in March, a sum that was later increased to £97.45. He claims that that share, which came from a total pot of £31,562 handed over by diners that month in his branch of the Ivy, was far lower than it should have been.
The waiter estimates that he was one of about 43 employees at the branch – including waiting staff, the kitchen team and management – meaning that his hours would have equated to about 2% of the total worked by staff that month. Yet he received less than a 300th of the service charge and tips collected. The Ivy disputed his calculations, arguing they were inaccurate and misleading. It said it used an independent consultancy to calculate how tips and service charges were shared. Lawyers working for the chain said he was a “disgruntled and discredited” former employee.
Under the law implemented last October, employers in Britain must share out 100% of service charges collected in a venue to workers there. It must be done in a “fair and transparent manner” and employees have the right to know “how tips are allocated and distributed”.
Diners at the Ivy, which was spun out of the London celebrity haunt and operates nearly 40 restaurants in the UK and Ireland, pay about £21 for fish and chips and £4.50 for a cup of coffee. Caring is attempting a £1bn sale of the business, which is owned by his Troia (UK) Restaurants parent company.
The Ivy said it had complied with the Employment (Allocation of Tips) Act 2023 and operated “a fair and transparent” scheme for distributing tips and service charge, which was “overseen by employee representatives and an independent, third-party business used by many restaurants in the hospitality industry”.
A spokesperson for Troia (UK) Restaurants said: “We absolutely refute all the claims that are being made and will provide all the evidence necessary to disprove these allegations to the employment tribunal.
“We introduced a fair and transparent scheme after consultations with staff that has been well received and is overseen by employee representatives and an independent, third-party business used by many restaurants in the hospitality industry.”
The Ivy said it shared out service charges via a system called a “tronc”, with different team members allocated “tronc points” that determine their share of the service charge each month. However, employees are not given an explanation of exactly how their tronc points are determined or how they compare with other team members’. Diners at the branch of the Ivy where the waiter worked pay an optional 12.5% service charge, with some adding tips on top. The firm says card and cash tips go directly to the individual who was given them.
The Ivy claimed that it was unable to give details on how tronc points were allocated because doing so would breach its employees’ rights.
The law states that gratuities must be shared out with regard to a code of practice and says there should be a written policy available to workers explaining “how tips are allocated and distributed and what steps the employer takes to ensure tips are handled fairly and transparently”.
Michael Newman, an employment law expert at Leigh Day, said: “This legislation was introduced to try and make the system fairer and the company has either managed to avoid it or the legislation hasn’t achieved its purpose. This case could clarify if employers need to provide more detail on how they distribute the service charge.”
The Ivy waiter’s payslips do not make clear which payments relate to personal tips and which to service charges and the company does not disclose how its waiters’ share of the service charge compares with kitchen staff, managers or other workers. It also does not reveal to workers how many individuals at a restaurant have shared the service charge. The Ivy has said that the worker “was provided with full details of his tronc allocation and how it was calculated, which included information which went beyond what he was entitled to receive pursuant to the relevant legislation”.
The waiter had worked on and off for the Ivy since November 2023 and said he sought clarification of his service charge and tips from last autumn and into this spring. He was given a warning about behaviour in April, which he claims included forgetting guests drinks and not emptying ice buckets. The business disputes those claims. He said that at about the same time he filed a formal demand for information on his service charge allocation, before resigning in June.
The tribunal hearing is due in April 2026.
