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Argentinian steak restaurant Gaucho is slashing the share of the service charge its waiters receive, using some of the funds to bump up the pay package of head office workers.

A letter to workers seen by the Guardian says that from 1 October existing waiters would receive between 25.45% and 29.4% of the service charge collected at tables they have served, depending on length of service, down from 37% previously – already a reduction from 45% early last year. Bar staff will get 17% of the service charge, down from 20%.

Newly employed waiters at the company will receive just 17%, according to a letter from Gaucho’s troncmaster – a specialist hired to manage the distribution of the service charge. Staff said they feared all waiters’ shares of the service charge would drop to that level in the new year, placing all workers on a similar level.

Gaucho’s troncmaster, a company called WMT Troncmaster, wrote in a letter to workers that the service charge would now be shared with “staff located at non-public places of business such as head office and central production units. This may also include staff working at Gaucho restaurants who are provided by an agency but who are not directly employed.”

“The Troncmaster strongly believes that service charges are paid by customers in respect of their whole experience, and that all team members who play a part and impact on that experience should participate in, and receive a share of, the tronc funds.”

A spokesperson for Gaucho said: “The new tronc distribution has been set by the independent troncmaster following industry benchmarking across our Gaucho employees. The new distribution takes into consideration all our front- and back-of-house colleagues. It is an equitable solution for all of our excellent people. The employee costs borne by the Gaucho business remain as before and the business itself does not benefit in any way from the amended tronc system.”

Gaucho says its new system is fully compliant with the law.

Gaucho is part of Rare Restaurants, which is owned by the Investec bank and investment firm SC Lowy, and which also owned the now closed M chain. Gaucho is held under the group’s Gioma UK arm, which slid £15.6m into the red last year as sales slipped 1% to £68.5m. At the end of last year Gioma had more than 1,000 staff, all but 64 of which worked in the restaurants, according to the accounts filed at Companies House.

Gaucho, which charges £65.60 for a steak marinated in chipotle chilli paste or £26.95 for a Sunday roast and at least £10 for a glass of wine, automatically adds a service charge of between 12.5% and 13% to customers’ bills, although they can opt not to pay it.

“The perception of people paying £100 in service charge will be ‘this guy is doing good’,” one waiter said. “But I could be getting [only a small part] of it.”

Under a law implemented last October, employers in Britain must share out 100% of service charges collected in a venue to workers there. It must be done in a “fair and transparent manner” and employees have the right to know “how tips are allocated and distributed”.

The law was introduced amid concerns the service charge was being used to make up a significant part of workers’ total pay package in retail groups to reduce national insurance liability. Service charge distributions do not always attract the employment tax when allocated through a tronc scheme, unlike ordinary pay.

Bryan Simpson, the national lead on hospitality for the Unite union, which is pressing the government to toughen up the tipping legislation, questioned whether Gaucho’s policy met the current rules.

He said: “One of the most egregious elements of this terrible policy is that tips and service charge can be used to pay ‘non-public places of business such as head office and central production units’. This is not fair or transparent according to the [government backed] code of practice, or indeed these workers, our members.

“The result for low-paid workers in the most expensive city in the world? That waiters may only receive as little as 28% of the tips that they received on their tables … with more than 70% going elsewhere.”

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Staff said they had not been consulted about the changes to the service charge distribution and had not received clear answers to questions about what would happen to what would happen to the cash they were no longer receiving.

One waiter said the cut came after the introduction of cheaper menus, which had already resulted in lower service charge payments, and a cut to benefits such as free and discounted meals and drinks. “Financially this is putting the nail in the coffin,” they said.

The worker said they would lose about £400 in service charge a month, reducing their monthly net pay to about £1,600 for 20 hours a week. All waiting staff earn the legal minimum wage, so rely on the service charge as a major part of their pay.

“I am quite worried. Potentially this means finding another job,” they said.

Another, who said they would lose out on between £300 and £600 a month, said: “We haven’t been consulted about these changes. The worst part is they said it’s to make it more fair for all departments, but what they are really doing is using this extra service to top up salaries through all company salary positions.”

Another said: “I already find it hard to pay everything when I get £2,000 (working full-time) so I am actively looking for another job. I don’t know how I am going to do it [in October].”

The cuts come only months after Rare Restaurants hired Baton Berisha, the former boss of the Ivy chain, which is facing legal action from a former waiter over the allocation of the service charge.

• Acquisition expands AbbVie’s psychiatry pipeline with the addition of a next-generation psychedelic compound currently in Phase 2 development for the treatment of major depressive disorder (MDD).

NORTH CHICAGO, Ill., Oct. 17, 2025 /PRNewswire/ — AbbVie (NYSE: ABBV) announced today that it has completed its acquisition of Gilgamesh Pharmaceuticals’ lead investigational candidate, bretisilocin.

Bretisilocin is a novel, short-acting serotonin 5-HT_2A receptor agonist and 5-HT releaser currently in Phase 2 clinical development for the treatment of patients with moderate-to-severe major depressive disorder (MDD). This next-generation 5-HT_2A receptor agonist is designed to help address current development challenges observed with classic psychedelic compounds.

“Recent clinical results have demonstrated the potential of bretisilocin to treat patients living with MDD,” said Daniel Mikol, M.D., Ph.D., vice president, neuroscience development, AbbVie. “With the acquisition now complete, we look forward to accelerating the development of this next-generation compound, reinforcing AbbVie’s commitment to delivering innovative, science-driven treatment options for people living with serious mental health conditions.”

For additional background on the acquisition, please read the press release announcing the definitive agreement under which AbbVie will acquire bretisilocin here.

About AbbVie

AbbVie’s mission is to discover and deliver innovative medicines and solutions that solve serious health issues today and address the medical challenges of tomorrow. We strive to have a remarkable impact on people’s lives across several key therapeutic areas including immunology, oncology, neuroscience and eye care – and products and services in our Allergan Aesthetics portfolio. For more information about AbbVie, please visit us at www.abbvie.com. Follow @abbvie on LinkedIn, Facebook, Instagram, X (formerly Twitter) and YouTube.

Forward-Looking Statements 

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SOURCE AbbVie