Mr M Palanki v The Big Table Group Limited — 2024

The claimant, Mr M Palanki, worked in a Front of House role at Las Iguanas Wembley and participated in the respondent's tronc system. The issue was whether discretionary service charge tips paid by customers by card, credited to the respondent's bank account and then paid out with wages, had to be included when calculating holiday pay. The tribunal accepted that the claimant had a contractual entitlement to receive whatever the tronc policy in force from time to time allocated to him, even though there was no entitlement to any guaranteed amount of tips.

On section 224 ERA 1996, the tribunal held that the tips were remuneration payable by the employer to the employee and therefore should have been included in the calculation of average weekly pay. It found that once the customer paid the tip to the respondent, the money became the respondent's money, and the respondent then paid an equivalent amount out to the claimant under the tronc arrangement. The tribunal rejected the argument that the statutory wording excluded any payment unless it was physically paid by a third party or fell outside the employer-employee relationship.

The tribunal also considered Revenue and Customs Commissioners v Annabel's (Berkeley Square Ltd) and held that the claimant's arrangement was materially different because the respondent itself held the tip money and paid it directly to employees, rather than passing it to an independent troncmaster who then distributed it. On that basis, and because the claimant's tips were intrinsically linked to the work he did, the tribunal found that the tips formed part of his normal remuneration for the four weeks of leave guaranteed by EU law. It therefore upheld both the unpaid holiday pay claim and the unauthorised deduction from wages claim.

The tribunal rejected the claimant's request for an Acas uplift. It found that the grievance response and appeal were adequate in the unusual circumstances of the case, that the respondent had not unreasonably failed to comply with the Acas Code, and that even if it had, an uplift would not have been just and equitable. No remedy figure was fixed in the judgment; the tribunal recorded that, if the parties could not agree the sums owed, a remedy hearing would be listed and might need to consider any jurisdictional issues affecting the amount recoverable.