OWNERS of a steakhouse chain with restaurants in York and North Yorkshire have asked furloughed staff to lend the business money to help it survive.
Tomahawk Steakhouse, which opened a branch off St Helen’s Square in York last year, told The Press that all employees had backed a voluntary loan agreement to help cover the employers’ National Insurance and pension contributions.
The chain has defended its actions after the GMB Union condemned the situation as ‘an outrageous abuse of the furlough scheme’ which would hit struggling low-paid waiters, pot-washers and cooks.
But the company said in a statement that staff had backed the move.
“At no point has Tomahawk Steakhouse suggested that members of staff would be sacked if they did not sign a loan agreement.
“Like the rest of the hospitality industry, we have faced a challenging year, and our priority throughout has been to protect our people and our business.
“As part of this and in order to survive the coming months, we asked our staff to sign up to a voluntary agreement to help us cover the cost of Employer NIC/Pension amounts, in the form of a loan.
“Every single employee chose to sign up to this agreement.”
GMB Union claimed the speciality steak house chain had called a zoom meeting for staff – many of whom are on minimum wage – and asked to borrow the money back from their pay packets.
The union said workers then received a letter, which included a loan agreement, saying ‘the company has a short-term cash flow issue and it now requires your help and support’.
It added: “We respectfully ask, in these difficult times, for you to support us by agreeing to pay your own Employer’s NIC/Pension Contributions by way of a voluntary ‘loan’ to the company, whilst we are in lockdown.”
Neil Derrick, GMB regional secretary, said: “This is an outrageous abuse of the furlough scheme and a legal loophole that must be closed. It’s never been easier for businesses to access cheap money.”
He said the request would ‘leave waiters and waitresses, pot-washers and cooks short of cash and force them to take out interest rated loans to cover the shortfall’.
“Tomahawk needs to take a long hard look at its behaviour – and this legal loophole must be closed before other companies follow suit.”
York MP Rachael Maskell who raised the situation with the Treasury Minister said Tomahawk should be seeking help from the bank, not staff.
The launch of York’s first Tomahawk Steakhouse attracted huge interest and advance bookings last summer.
Director Howard Eggleston told The Press at the time that the response on social media had been ‘overwhelming’ and beyond what he had experienced for his other venues which include the Husthwaite Hotel & Steakhouse in Husthwaite, North Yorkshire.
Under the furlough scheme, an employer must pay the full amount they are claiming for their staff’s wages to the employee, and must also pay the associated employee tax and National Insurance contributions to HMRC.
The government website states: “Employers cannot enter into any transaction with the worker which reduces the wages below the amount claimed.
“This includes any administration charge, fees or other costs in connection with the employment.
“Where an employee had authorised their employer to make deductions from their salary, these deductions can continue while the employee is furloughed provided that these deductions are not administration charges, fees or other costs in connection with the employment.”