Leroy the latest restaurant to call time on discretionary service charge

Leroy in east London has become the latest restaurant to stop adding a discretionary service charge to bills, explaining “if you want to eat in a quality place it will cost you more, but you will also be doing better by the people who serve that food”.

Co-owners of the Michelin-starred restaurant, Ed Thaw and Jack Lewens, encouraged other independents to also incorporate the cost of service into menu prices.

They have joined chef Selin Kiazim of Oklava London in making the move after the government failed to recognise service charge, tips and tronc payments as wages in an employee's furloughed pay calculations, which means some hospitality workers have received 60% of their normal take-home amount, rather than the 80% intended by the Coronavirus Job Retention Scheme (CJRS).

Leroy had never operated a formal tronc system, with Thaw and Lewens explaining through social media that it always seemed unfair to them that employee wages would be “subject to the ebbs and flows of our business”.

They explained: “We believe in the dignity of hospitality as a career and we believe that extraordinary experiences need extraordinary people who deserve to be paid properly.

“Service charges were much misunderstood by diners but ultimately having it separate from menu prices also means that the government doesn't add VAT to it. And, for us, the government makes enough money from eating out. It does not need to make more. Our employees need it more.

“Nevertheless, we believe that the time is right to stop adding to service charge to bills and we encourage all independent operators to do the same. If you want to eat in a quality place it will cost you more but you will also be doing better by the people who serve that food.”

Kiazim, who explained that this prompted the government’s stance had prompted her to make the change, despite not using a formal tronc service, had earlier said: "We will no longer be making a large portion of our staff's wages open to discretion.

"What you see on the menu is what you pay – and you (and us too) will be confident this goes towards a healthy restaurant with staff that are paid what they deserve…”

The government’s decision to exclude tips, tronc and service charge from furlough payments has seen many hospitality employees receive considerably less than 80% of their wages. Despite considerable pressure from the industry it has not made any concessions to provide further financial security to the sector's employees, which has led to much speculation over the future of tip and service charge payments.

In May The Caterer spoke to leading industry figures on both sides of the debate.