Taoiseach says he is ‘minded’ to abolish service charges

Taoiseach Micheál Martin has said he is “minded” to abolish the use of service charges on restaurant bills, saying there should be “full and absolute transparency” governing such charges.

He was responding to Independent TD Joan Collins in the Dáil on Tuesday, who raised a recent Labour Court ruling that two migrant women were unfairly dismissed by The Ivy – operated by Troia UK Restaurants Ltd – in Dublin on foot of trade union activities.

Julia Marciniak and Lenka Laiermanova were fired from the restaurant in March 2019. They had worked at the high-profile eatery on Dublin's Dawson Street since soon after it opened in summer 2018.

Initially hired on hourly rates of €10.55 and €12 plus 80 per cent of tips (with the other 20 per cent going to back-of-house staff), that arrangement turned sour when tips and service charges were withheld and instead used to part-pay those contracted hourly rates, making up the difference between minimum wage and their stated pay.

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When Ms Marciniak and Ms Laiermanova raised this and other issues with management and got nowhere, they went to Ms Collins and joined Unite.

‘Wider significance’

Ms Collins said it was “quite rare” for an unfair dismissal case of trade union activity to be won in the Labour Court, and that the case had “a wider significance”.

“That significance is that while the Unfair Dismissals Act only kicks in after a year with a specific employer, there are exceptions [to this], one of which is trade union activity,” she said.

“However, that one-year rule does give some employers and managers licence to dismiss workers on a whim.”

The Dublin South-Central TD said she wanted to congratulate the two women and that the general issue of service charges had to be dealt with.

“That [service charge] has to go in my opinion, and The Ivy still has a 12.5 per cent service charge on all tables,” she said.

“It is used to pay wages and supplement business income. An owner-manager of a bar-restaurant, Conor O’Meara, says service charges should be abolished and I concur.”

Wrong impression

Mr Martin said many people were under the impression that when they pay a service charge, it went to workers, and that was “not the case in many instances”.

“I think we need absolute transparency and ideally actually, I think the consumer should be handing [tips] directly to the employee or group of employees, however those mechanisms can be facilitated, as an additional sort of contribution.”

He said he was “minded” to abolish service charges, adding: “I think in any event there should be full and absolute transparency governing them.”