Gaucho denies reports waiters’ service charge will be used to pay head office

Restaurant chain Gaucho has denied claims that it has cut the share of service charge given to waiters in order to boost head office staff pay.

Last week the Guardian reported waiters and bar staff at the steakhouse group had been told they would see their portion of the fee reduced from 37% to between 17% and 29.4%, depending on their length of service, from 1 October.

The paper said Gaucho’s troncmaster, WMT Troncmaster, had told employees that the proceeds would instead be shared with “staff located at non-public places of business such as head office and central production units”, as well as agency staff.

However, it is understood no head office staff will receive a share of the service charge, contrary to earlier reports.

Instead, the fee will be shared among 31 different roles within the restaurant teams, including chefs, receptionists and kitchen assistants.

The Caterer understands the changes were made in response to comments made in exit interviews by wider Gaucho team members.

Gaucho adds a service charge of between 12.5% and 13% to customers’ bills, though they can choose not to pay it. 

A Gaucho spokesperson said: “The new tronc distribution has been set by the independent troncmaster following industry benchmarking across our Gaucho employees. The new distribution takes into consideration all our front and back of house colleagues. It is an equitable solution for all of our excellent people. The employee costs borne by the Gaucho business remain as before and the business itself does not benefit in any way from the amended tronc system.”

The controversy comes after the Employment (Allocation of Tips) Act came into force in October 2024, which requires staff to receive 100% of the money they earn through tips and service charge.

Under the terms of the act, operators are required to be “fair and transparent” and employees have the right to know how tips and service charges are shared out.

Bryan Simpson, the national lead on hospitality for the Unite union, criticised Gaucho’s policy and told the Guardian it was “not fair or transparent”.

It is understood Gaucho believes it is fully compliant with tronc legislation and distributes all tronc to staff.

Gaucho was founded in London in 1994 and has since expanded to 20 restaurants, the majority of which are in London.

The steakhouse chain was acquired out of administration by Investec Bank and SC Lowy in October 2018. It is part of the Rare Restaurants group, which also owned the now-closed M chain.