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London Steakhouse Accused of Forcing Employees to Loan Back Their Salary

The GMB Union says Tomahawk Steakhouse told furloughed employees to sign a new contract, in which 10 percent of their salary would be loaned to the company

A spread of steak, prawns, fries, and lobster from Tomahawk Streakhouse, on a wooden background
A spread of steak, prawns, fries, and lobster from Tomahawk Streakhouse
Tomahawk Steakhouse [Official Photo]

A steakhouse chain which opened its first London restaurant in December 2020 has been accused of forcing its employees to loan back 10 percent of their salary while on furlough — the government scheme which covers 80 percent of the wages of workers unable to work due to the coronavirus pandemic. Tomahawk, which took over Jamie Oliver’s former flagship restaurant Fifteen in Hoxton, allegedly informed staff that they would have to sign a new contract to help the business survive lockdown. Staff which spoke to the BBC said that the chain also told them that not signing the contract would risk Tomahawk needing to “see if this job’s right for you.”

The company reportedly told its entire staff of the proposal via Zoom and by letter, informing them that it had a “short-term cash flow issue.” Government loan schemes designed to support businesses with coronavirus cashflow problems remain open to the end of March, but the company told employees that the “only viable alternative is to ask for your agreement to a loan arrangement,” because of its requirement to pay National Insurance and pension contributions for furloughed staff.

Tomahawk has said that it has had “100 percent” take-up on the scheme and denied claims that take-up would be due to the implied threat of dismissal. It said: “At no point has Tomahawk Steakhouse suggested that members of staff would be sacked if they did not sign a loan agreement.”

The GMB Union, which represents which represents over 600,000 workers in the U.K., called the plan “an abuse of the furlough scheme.” Its regional secretary Neil Derrick pointed to the fact that “it has never been easier or cheaper for businesses to borrow money,” and said that Tomahawk “want it for free and they have solved their cash flow problem by giving a cash flow problem to their staff.” Throughout the coronavirus crisis, furlough has not taken tronc — a widely adopted system for distributing tips — into its calculations, meaning that many restaurant workers have not been receiving 80 percent of what they normally earn, putting them at particular risk in the case of any further deductions.

Tomahawk has five other restaurants outside of London. When moving into Jamie Oliver’s former restaurant last winter, it said that “we have given the whole venue a new lease of life.” When Jamie Oliver’s group was marketed by Christie and Co after its collapse, the annual rent on Fifteen was listed at £128,000 pear year, with offers starting at £50,000.