The CBC has put together a pretty damning report on the Glowbal Group’s tip distribution pool, with former managers alleging that owner Emad Yacoub keeps a percentage of server tips for himself…
“Emad’s cut is determined by whatever the profit is in tips,” said one.
They also said servers had no choice but to pay the house charge. “Even if they were short [on tips] they had to pay out of their own pocket,” said one of the ex-managers.
Yacoub said Glowbal Group’s restaurant income for 2011 was $26.7 million, so the 4.2 per cent house charge to servers would have been approximately $1.12 million that year.
The disgruntled former manager suggested Yacoub may have kept up to half a million of that, in cash.
“The tip thing is huge. It becomes huge money by the end of the year,” he said. […]
B.C Minister of Labour Margaret MacDiarmid said Zesati’s complaint about Glowbal Group’s tipping system will be investigated.
“Tips cannot be used for business expenses,” said MacDiarmid. “If there’s money owing an employee, they [investigators] will leave no stone unturned to get that money.”
“I hope if there’s anybody else out there that’s suffering through this, that it comes out,” said Zesati.
Good luck with that. What Emad is accused of is pretty common in the restaurant business. When I worked in the trade, most of my employers had tip pooling systems that were controlled by the house. At the end of the night I’d put my tips in an envelope, drop it in the safe with my cash-out report, and hope that I’d get more than half back. Sometimes I did, sometimes I didn’t. It was a mystery what the house did with the rest. I knew a high percentage would go to tipping out management and support staff, but I could never be 100% sure about ownership. I’ll be giving Emad the benefit of the doubt here; innocent until proven guilty, and all that. But boy, he’s had couple of weeks of negative PR! First the shooting, and now this. Makes you wonder what’s next.
UPDATE: Emad and the Glowbal Group are suing the CBC and the writer of the article. Statement after the jump…
The Glowbal Restaurant Group is Committed to its Team and Guests, and is Thankful for their Continued Support
(Vancouver, BC) On April 2, 2012, the CBC aired a story about tip disbursements that singled out The Glowbal Restaurant Group. However, the CBC’s Kathy Tomlinson report of allegations that question employment standards adherence and that tips are used for purposes other than what they are intended are categorically false and inaccurate.
“We are completely transparent with every member of our team in regards to our policies, procedures and daily practices surrounding tips,” says Emad Yacoub, CEO of The Glowbal Restaurant Group. “Simply put, our senior executive team does not take tips, and no money from the tip pool is used for business expenses. Operations and front-house managers, our kitchen and dishwashing teams, hostesses, bussers, food runners and bar staff do share in pooled funds in accordance to our policies. This is a standard practice in our industry and we believe this is fair. Our employees share the responsibility for ensuring guests have a positive experience in our restaurants. In return, they each share in the pride of that success and the generous thanks that our guests extend.”
“It is curious and unfortunate that Ms. Tomlinson and the CBC chose to air a story based on the false accusations of former employees. It is equally baffling as to why Ms. Tomlinson chose to focus on The Glowbal Group when the practice of pooling gratuities is an accepted standard in the hospitality sector in Canada.”
The Glowbal Restaurant Group and its CEO Emad Yacoub will file a lawsuit in BC Supreme Court against the CBC, CBC reporter Kathy Tomlinson and the former employees over unjustified defamatory allegations. The Glowbal Restaurant Group and Yacoub will be seeking general, aggravated, special and exemplary damages and legal costs, and a Court injunction requiring the CBC to remove all of the false allegations from its Internet website.
“I have been left with no option but to take legal action against the CBC and Ms. Tomlinson to redeem my reputation and that of my business,” says Yacoub. “We will continue to serve the city we love so much. Our priorities remain with our team and our guests, and we are thankful for their continued support.”
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I’ve never been in the restaurant industry but even I know this is the system in place throughout the GVA.
Article seems to be an attempt to sensationalize a non-issue.
I agree with you there.
That’s what he gets for suing his own flesh and blood. Karma is a bitch.
i know for a fact this happens everywhere. a portion goes to the kitchen as well. I have never seen a owner take a cut. pretty ridiculous emad has acces to millions im pretty sure he is not looking to make pennies.
Comments from anonymous disgruntled, former employees says it all
Just want to step in and say this certainly does NOT happen everywhere. I’ve worked for Sean Heather, Jack Everensal, Bud Kanke and other major Vancouver players and in my experience, have never had a cent of tips going to the ownership. Occasionally a floor manager will be involved in a tip-out, if they’re active on the floor, contributing to sales (ie- totally carrying their weight,) which I don’t think is unethical.
Whether or not these allegations are true, they certainly wouldn’t be limited to one group of restaurants, I’m not naive enough to say it doesn’t happen – maybe on a fairly common basis even – but to say “this happens everywhere” is an absolute falsity and misleading. That may be one’s own experience, but that doesn’t make it the norm.
I often wondered it it was legal for management to be tipped out in B.C. as with other countries I have worked in, or rather depending on which state, it is completely not ok for management to be tipped out nor owners. This uncertainty was reinforced by someone who had worked at Starbucks in Vancouver who mentioned that in B.C. Starbucks management was not allowed to even handle the tips. Was that a cross the board corporate mandate or was that a global company obeying the province/state regulation i wonder?
If true it would certainly open the potential for litigation all over Vancouver.
Tips are for service and in North America they make up for the lower than minimum wage that front of house are paid. It is shameful to think that not only are Servers and Bussers not being paid a minimum wage by the owner but that the tips that customers think is for the service staff is being skimmed by the owner. And I for one am glad someone has finally said something about this injustice, because as anyone who has worked hospitality in different provinces, states or countries will know… Vancouver is one of the worst places to make money serving due to the high tip outs.
Seems like slander from FORMER employees. I have friends who work for the Glowbal group including management and I have seen nothing but unfaltering support for the great organization they work for.
The former employee needs to be careful here seeing as tips are rarely declared for during tax time. I hope she has herself covered or her outburst may end up with an audit.
Also, “First the shooting, and now this. Makes you wonder what’s next.” That type of sentence is the only part of this article that may make the easily influenced “wonder what’s next”. The shooting is unrelated and any association with that story and this one is a desperate stretch.
Er, I’m aware that the shooting is unrelated. I was commenting on the string of bad press is all. The only desperate stretches I do are in the mornings. 😉
Also, “The former employee needs to be careful here seeing as tips are rarely declared for during tax time. I hope she has herself covered or her outburst may end up with an audit.” Agreed. No one likes to see how sausages are made, except Revenue Canada.
I used to work for the Glowbal Group and can guarantee you that they do not properly distribute tips. I was a cook and get a measly 60 dollars every two weeks while we were putting out thousands of dollars of food every night. One day during the Olympics we sold 80 000 dollars worth of food, and another 80 000 worth of alcohol. All servers are forced to tip out both the kitchen and the bar, and the amount they did was far greater than the amount a cook would receive. All the extra money was either being used to pay for managers bonuses or was going into Emad’s pockets.
^ Objection. Speculative. I get how frustrating it can be to see your tips distributed to management and such, but if it’s a team effort, it’s the way it should be.
Re. Declaring tips: The government has tacitly agreed that servers make a certain amount of wages via tips and they have set a special minimum wage for them, despite many other industries where gratuities are expected. I for one think this is discrimatory, Andrew disagrees. Nevertheless, the argument about declaring tips is a red herring. It’s moot. It’s a talking point.
Why you get me in trouble.
Why don’t these “smart” restaurant operators make the gratuity system more transparent as in every night with closing reports the percentages of sales from each server, or nightly sales are broken down using an excel spread sheet and kept in a binder for all to look through.
Seriously this is how it is done in the worlds best restaurants for good reason…
I can assure you that what is happening in Vancouver does not happen in the other provinces. at least not in Nova Scotia, Quebec and Ontario.
Re: tips and tax – How is it a red herring? A provincial labour law has no relevance to a CRA audit and consequentially regardless of whatever rate of pay is set by a province, failure to report tip income is – for Federal tax purposes – a real risk if one is getting in the press (accordingly, the above comment, while factually speculative is not in the realm of the red herring)… Any provincial that has “tacitly agreed” anything about tips has no relevance to the CRA….
The nature of the gratuity exists under the table. It’s unofficial, yet socially obligated and therefore cannot be denied nor confirmed. If honesty is the goal here, eliminate the gratuity, satisfy the tax hounds and trust proprietors to account for employee expenses within the advertised price of the food and drink. I am astounded by the use of the honour system here.
When I make $150 a night. I go home with $150 (less 1% for BOH, less 1% for bar), I don’t tip to house. I know many other servers that don’t tip to the house. Scout – I understand your backing-up of Restaurateurs; why, that wouldn’t be cliche if you didn’t. Like this argurment – it’s all about the bottom line. Perhaps if you are nice to them, they will jump on board your Scout train?
More money for you
This is classic PR, Global is under investigation (that is a FACT) so they want to get ahead of the story and chill the whistle blower. I heard the CBC story this morning, Emad Yacoub stated his position and the employee was also interviewed. CBC just reported both sides of the story and left it at that. This STATEMENT (about a possible lawsuit) is just a distraction
It’s illegal to use tip money to either a: pay for the cost of business b: go to the owner/managers. Read the employment standards act.
Say what you will, but collecting house tips is industry standard. Period. If there is an issue with this practice, CBC should have examined this from an objective point of view. I worked for Emad and Shannon for 5 years and the tip out was clear: 2% to the bar, 1.5% to the busser (suggested – when I served I usually gave 2% because they work their butts off) and 3% to the house. This may seem high (I read the girl above quote a 2% total standard) but I’m guessing that is in a restaurant/pub with no hostesses, bussers etc. That remaining 3% is split amongst hostesses, the kitchen and floor management. It should be noted also that I made far more serving than I did managing (this is common).
This is industry standard. At fine-dining (I have friends who work at Hawksworth, Blue Water, and Boneta and I have worked at glowbal group, the beach house (pre-Fullers), earls, fine-dining at a mom & pop in Victoria and more). Whether this standard is positive is up for debate; what isn’t is the pointed “smear-factor” of the CBC piece. It will be very interesting to see who their two “sources” were. I think I know and I can assure you this was definitely a strategic move and that they are themselves the worst employers in the city.
PS (a separate issue, but one that keeps getting broght up): for the people questioning the legitimacy of chain restaurants – they are what they are. I eat at both bespoke one-off restaurants and chain restaurants, and they both have their merits. If I’m having my anniversary dinner or am looking for a culinary experience, I go to Bishop’s or Vij’s. When I want pork, pasta or pizza, I go to Peckinpah, La Buca and Nicli. Brunches I frequent small businesses like Jethro’s, Habit and Aphrodite’s. And when I want a fun night out with girlfriends or a reliable business lunch, I go to Italian Kitchen or Cactus Club. There are no universal truths, just a hell of a lot of great choices in this city. Happy eating.
@scout writer
“Er, I’m aware that the shooting is unrelated. I was commenting on the string of bad press is all.”
Fair enough.
My take on this situation is as simple as if you don’t like your working conditions you can quit. If the Glowbal group is going to hire you, I’m sure other restaurants would too. Unless of course you are a whiner…..
http://www.guardian.co.uk/commentisfree/cifamerica/2012/apr/03/wages-in-restaurants
I can safely say, as a cook, it’s a complete mystery to me as to where the tips actually go. I’ve seen my restaurant’s tip pool percentage breakdown, and know approximately who gets what. That doesn’t explain why most every second week is the same tip out. I’m not an idiot, I know exactly how much business we do a night, and you would assume some fluctuation, but it doesn’t happen. I wouldn’t be surprised if the ownership of some restaurants were skimming tips for themselves, especially when you get to the larger groups and the hundreds of thousands of dollars in “tax free” money. Also, not every disgruntled ex-employee is a liar. I’d like to hope they’re trying to do what they think is right, by exposing what could potentially be a corrupt system.
THE GLOWBAL RESTAURANT GROUP STATES COMMITMENT TO EMPLOYEES AND GUESTS
http://www.glowbalgroup.com/the-glowbal-restaurant-group-states-commitment-to-employees-and-guests/
Karma’s a bitch! It’s no secret that the Glowbal Group has the worst reputation amongst service staff in Vancouver for being a toxic environment. Stories of Emad’s rages, throwing cel phones at staff, chefs belittling you in front of Emad or customers, managers giving negative speeches after openings or poor nights when their sales projections aren’t met… the list goes on and on.
The one thing that CBC should invesitgate is whether top level managers (not floor managers, per se, but assistant managers etc…) own “shares” in the company. Rumour has been for the last few restaurant openings: Black & Blue, Trattoria, Coast… that managers who invest in the restaurant, get shares paid out to them. CBC and Revenue Canada should definitely look into that!
As for the tip pool, CBC should ask what the total tip out is: lately it’s more around 7.5 to 8% in the newer restaurants. (Sorry Alexis, your 6.5% is old school and dated) I worked for the Glowbal group and never saw where that tip money went. There’s a lot of cash filtered through those restaurants, and it’s no secret that the gangs in this city use the Glowbal group continuously and pay in cash (easy to manipulate or take items off the table bills when you have a $5000 table paid in $20 bills! Happens a lot)
just cook at home and save your money, pretentious yuppie scum – you’ll be crushed when the real estate finally reverts to mean
“never believe anything until it’s been officially denied”
what phase are we at?
Thanks for the pick me up, dear.
This problem could easily be solved. Emad needs to sign up for the industry boxing tournament.
“There’s a lot of cash filtered through those restaurants, and it’s no secret that the gangs in this city use the Glowbal group continuously and pay in cash (easy to manipulate or take items off the table bills when you have a $5000 table paid in $20 bills! Happens a lot)”
Just FYI, the gangsters buy their milk at Safeway and pay in cash there too.
Glowbal announced on their website that all seven of their restaurants will be closed today for lunch. Guess the crooks are having an emergency meeting. Why close all seven restaurants for lunch on Good Friday?
Shot in the dark: “The Catholic Church treats Good Friday as a fast day, which in the Latin Rite of the Church is understood as having only one full meal (but smaller than a regular meal) and two collations (a smaller repast, two of which together do not equal one full meal) and on which the faithful abstain from eating meat. In countries where Good Friday is not a day of rest from work, the afternoon liturgical service is usually put off until a few hours after the recommended time of 3 p.m.” Maybe take it easy.
So Glowbal always closes all seven restaurants on Good Friday? Every year?
One can speculate or let the truth out in good time.
Sure. But, on the other hand, speculation is the handmaiden of progress and knowledge.
It is also brother to the litigious.
We’ll see who’s lying. I’m aware of facts which you are not. Let the poison inside the figs come out.
Methinks Yacoub is not a Catholic…..From what I have about this subject, the restaurant industry is crooked and all restauranteurs should be audited!!!!!
And opening so many restaurants shows to me that skimming tips is a very profitable business. 1/2 million$/year per restaurant (8?) in cash can buy a lot of restaurant !!!!
No wonder he has so many locations…..
CRA should be all over this guy. And if they are not, then we know who they work for!!!!
Joeblo. I think his inlaws may be catholics. In fact I would be shocked if they weren’t.
Well, we all know that it’s a pretty seedy business at best. Good god, I’ve worked for my fair share of lunatics and know as a fact that they stole tips, not to mention didn’t pay for all your hours worked. I’m sure that good old Emad is just like the rest of them, but I’ll give him the benefit of the doubt .
Theres a lot more than money being thrown around and strange positions at their restaurants late at night. Here what we have is evil business action going down. Looks like there is a gump in the forest…Life is like a box o’ cHocOlAtEs….you never no what your gonnA get.
What do you exspect, it’s pretty much the jizz bizz
money can’t buy you love!
Update on Glowbal suing CBC is that they are NOT suing. As of today, May 6, CBC has not been served. Emad’s press release was hot air, intended to stop other employees from coming forward. What these employees may not realize is that you can’t be sued for defamation if the allegations are true. That’s why Emad has not filed a lawsuit — his fancy lawyers advised him that he can threaten to sue, which silences prospective whistleblowers, without following through. After all, the waitress in the article, my daughter, has solid proof, which is now in the hands of a lawyer. A little surprise piece of evidence she has would definitely be the nail in his coffin.
I worked as a cook at Sanafir, and I can attest that these allegations involving tip discrepancies are definitely true. Granted, shady practices regarding tips aren’t unusual, as I’ve seen in my 10 years in “The Industry”, but Glowbal takes the cake when it comes to a “toxic” work environment, and they deserve all the bad publicity they can get.
At Sanafir, I did not receive ANY tips for the first 3 months I worked there. When I asked about it, I was belittled and called a “liar” in front of my coworkers. Eventually, I got some of the money back, but the embarrassment and humiliation of what I had to put up with on order to get it was absolutely uncalled for and ridiculous
Also, they “ask” you to work “optional” unpaid hours. My daily paid hours were 4-12pm. Generally, as a cook, you are required to show up to work several hours before “service” or “opening” to complete your prep work and set up for dinner. My specific section could take anywhere from 1-4 hours of set up time, for which I was not paid. If these “optional” hours go unworked, it is impossible for the restaurant to operate.
Unpaid hours are common in an industry with a low profit margin. But for a company that had a restaurant income of $27.6 million in 2011 (according to Emad Yacoub himself) this is completely ridiculous and frankly immoral and unethical. It is comparable to stealing money from a homeless person.
restaurant Staff should be paid for EVERY HOUR of work regardless. It doesnt matter, even if you dont think working in a restaurant is a “real job”. Because these are real people, and the hours they sacrifice to work are also very real.
For me personally, its not just Glowbal. From what I’ve seen over the years, the restaurant/hospitality industry is full of questionable behavior and practices that include blatant sexual innuendos, Racism, general condescending attitudes, tip stealing, LOTS of unpaid work, etc.
Ultimately this had led me to pursue other employment options.
SS, You can file a complaint with B.C. Employment standards act. You could very well receive back wages for unpaid hours. My daughter would be interested in talking with you for sure. No employee should have to work unpaid hours, which, btw, my daughter did as well at Glowbal.
This ain’t nothing compared with the old Allegro days. You talk about you toxic work environments. OH WOW LOL!
Bronwyn, thanks for your info on the BC employment standards act. I would be more than happy to talk with your daughter about my experience at Glowbal.
They genuinely are first rate scumbags, and I am willing to do whatever I can to help stop this type of thing from happening to other people.
SS, You can reach us through my email or on Facebook. Prefer a private message on Facebook if you’re a member. Send me a friend request. If you’re not on Facebook, leave a message here and I’ll give you my email, and we will arrange something. Send the friend request to Bronwyn Elko on Facebook. You’re so right about Glowbal being goons dressed up in fancy suits. My daughter wants to hear about your experience.
I worked for this guy for almost 2 years and every week my tips were 40-80 dollars. For a high end restaurant that is terrible. Even when I worked at a Boston Pizza when I was 18 I was making 300 or so a month in kitchen tips. So obviously the money is going somewhere. Take a look at what MR EMAD is driving. That Aston Martin didn’t pay for itself……….
B.C Standards called my daughter, the server, to inform her that her complaint has been resolved. Point of fact: Glowbal did not dispute my daughter’s claim re: monies owed to her. Glowbal sent a cheque to B.C. Standards, which will be forwarded to my daughter shortly. If Glowbal is innocent of stealing my daughter’s tips, why did he not dispute the complaint? Why pay her?