by Nigel Morris
Banqueting managers at The Dorchester, one of the country's most prestigious hotels, have been deducting money from service charges and adding it to their own, a BBC London investigation has discovered.
A former employee says the deductions were supposedly for "poor performance" and were made without the knowledge of the workers concerned.
But a spokesman from The Dorchester, based in Park Lane, central London, said "all employees are made fully aware" of the service charge scheme rules, which comply with employment laws.
According to documents, seen by BBC London, thousands of pounds were docked from staff service charges using a "penalty points scheme" over a five-month period.
In one instance, the lowest paid worker had his service charge payment almost halved without discussion.
One hotel employee told BBC London: "I might as well have handed those managers my cash-point card and said: 'Here help yourself - here's my pin number."
Union chiefs described the practice of deducting staff bonuses for the benefit of managers, without informing employees, as "potentially illegal" and "immoral."
The BBC understands that the practice came to light when a member of the banqueting staff gained access to his manager's computer.
Spreadsheets showed the penalty deductions from various members of staff between January and May 2007. The employee was suspended for gross misconduct for unauthorised access to the computer.
He no longer works at the hotel.
A spokesman for the Dorchester told BBC London that in early 2008 they had been involved Employment Tribunal proceedings with a former member of staff, who had unlawfully accessed and removed confidential information belonging to the hotel.
These proceedings were eventually resolved on agreed, commercial terms, without admission of liability.
He added: "Following the conclusion of that case, the hotel conducted a review of its service charge scheme and it is confident that it will not face any further claims or disputes in relation to the operation of the scheme."
Documents seen by BBC London show that in January 2007 a total of £1,304.45 in penalties was deducted from the service charge payments of six individuals, including the two lowest paid workers.
The £1,304, re-branded as a loyalty bonus, was then split three ways between the banqueting manager and his deputies giving them an extra £435 each.
As part of its investigation BBC London tracked down another banqueting employee, who did not want to be identified, living in Serbia.
We asked him if he had ever had money deducted or whether he was informed that deductions were to be made from his service charge payments.
He said: "No, never, it never happened. No one ever told me that money had ever been deducted for any reason… it is still very hard for me to believe.
"People from HR told us if anything is wrong, anything bothering you just contact us, and I didn't have any reason to do that."
Within any employment contract there exists "implied terms", the most important of these is the "duty of mutual trust and confidence".
This means that both employee and employer rely on each other to be honest and respectful.
"I think it is certainly wrong and believe it is potentially illegal"Derek Simpson, Unite
The former Dorchester employee said: "It was going to three managers. They claimed it was a loyalty bonus. But how do you describe a loyalty bonus when every single member of the team is giving 110%?
"I mean if I'm underperforming at least have the decency to tell me then I can turn it around. But then why should those managers benefit from my discrepancies or mistakes or underperforming. It just doesn't make sense."
The Dorchester Hotel maintains the service charge scheme had been a success since it was introduced three years ago.
A spokesman said: "The Dorchester employs over 600 members of staff and has consistently been recognized for the care and benefits that it offers its employees.
"These benefits include a service charge scheme for members of staff working in the Banqueting department.
"Employees who participate in this scheme are made fully aware of its rules, which allow for deductions to be made from the service charge payments in certain circumstances."
He added: "These rules are compliant with all applicable employment laws. The service charge payments do not form part of employees' wages and the employees who participate in the scheme are in any event paid considerably in excess of the National Minimum Wage at all times."
The union Unite, which represent hotel workers', is campaigning for a change in legislation to make the tips regime in all restaurants and hotels more transparent.
Derek Simpson, joint general secretary of Unite, said the practice of deductions being taken from bonuses without notifying employees was "wrong".
He said: "I think it is certainly wrong and believe it is potentially illegal.
"You would be quite amazed that these credible household names would be involved in a practice that most people would regard as unethical, despicable, certainly not one that you would give them any brownie points for."
About The Dorchester:
- The Dorchester Hotel, built in 1931, is part of the Dorchester Group owned by the Brunei Investment Agency the investment arm of the Government of Brunei’s Ministry of Finance.
- The Sultan of Brunei is the 10th richest man in the world with a fortune of £18bn.
- The hotel is consistently ranked as one of the world’s best hotels