London steakhouse accused of forcing employees to loan back their salary

Employees could have faced being sacked if they didn't agree with the demands

Robert Percy posted in Meat
7w ago

Let's face it, lockdown has been really tough on the restaurant business. When people are legally not allowed to go out and eat, it makes the whole deal of running a restaurant incredibly difficult if not absolutely impossible. As a result, some of them have been resorting to somewhat desperate measures to keep the business alive. Perhaps the most controversial of these measures so far has come from Tomahawk Steakhouse which, according to the GMB union, told employees to sign a contract that required them to loan 10% of their salary back to the company!

Tomahawk Steakhouse, which took over Jamie Oliver's former flagship restaurant Fifteen in Hoxton, London, were allegedly told that signing this contract would help the business survive lockdown and if they didn't Tomahawk would "see if this job’s right for you." In other words, it was either sign on the dotted line or you're fired. The employees were reportedly told of this via a Zoom call and by letter (the letter ended up being seen by the BBC), with Tomahawk telling them that it was due to a "short-term cash flow issue."

Whilst government loan schemes to help businesses like restaurants survive are operating until the end of March, Tomahawk felt that the "only viable alternative is to ask for your agreement to a loan arrangement" due to the need to continue to pay National Insurance and pension contributions for furloughed staff. In addition to this, Tomahawk assured members of staff that these loan agreements would be repaid "once the lockdown is eased sufficiently for the company to trade", whenever that may be.

GMB regional secretary Neil Derrick had this to say about Tomahawk's decision: "It's never been easier or cheaper for businesses to borrow money than it is at the moment during the pandemic, but this business, Tomahawk, want it for free and they have solved their cash flow problem by giving a cash flow problem to their staff. It stinks and we think it is an abuse of the furlough scheme, we think it is an abuse of the job retention scheme and we've asked HMRC to investigate."

"Staff have been told that if they do not agree to the loan agreement their suitability for the role will have to be reviewed, and we all know what that means, that's a threat of dismissal."

One member of staff who spoke to the BBC who did not wish to be identified said that Tomahawk's propsals "made me very angry. Everybody is already worried about money, but then to be taking more off us for the company when the company has just opened a new restaurant in London, surely they must have money behind them rather than just relying on staff to give them a loan."

Labour MP for York Central Rachael Maskell has also spoken out in support of Tomahawk's employees, saying that the company's behaviour is "disgraceful". She went on to add that "If it isn't illegal it certainly is immoral and it is certainly punitive to the staff that they employ." She has written to the government about the issue.

A spokesperson for Tomahawk Steakhouse has since responded to the allegations. "At no point has Tomahawk Steakhouse suggested that members of staff would be sacked if they did not sign a loan agreement," the spokesperson said. The statement went on to say that, like the rest of the hospitality industry, Tomahawk Steakhouse had faced a "challenging year" due to coronavirus restrictions but the company's priority was to "protect our people and our business" during this time. The spokesperson also stated that "every single employee chose to sign up to this agreement" when it was put forward.

In response to the controversy surrounding this, a spokesperson from HMRC said that HMRC would "support any taxpayer in financial distress as a result of Covid-19 and we would urge any employer that may struggle to pay its outstanding tax liabilities to contact us as soon as possible." He made it very clear that anyone who was concerned about their employer abusing the furlough scheme should contact HMRC directly.

Tomahawk has branches in five other places outside of London (York, Middlesborough, Beverley, Newcastle and Durham).

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Comments (6)

  • The company where a friend of mine works decided to reduce 10% of the salaries by converting that 10% as bonus which depends on the performance of the company 😑

      1 month ago
  • Yikes!

      1 month ago
  • It's ok for as long as it's asset secured loan and with the interest at a current market rate. However, it is most likely not. Besides, these places are usually staffed by young people. Reading and understanding loan contracts is hard enough for older experienced people, let alone for someone just out of school.

      1 month ago