Rambagh Palace Hotel, Jaipur Vs. The Rajasthan Hotel Workers’ Union, Jaipur

Citation: AIR1976SC2303

Decided On: 05.01.1976

Court: Supreme Court of India

Held:

Tips are paid to the waiters directly or in the shape of service charges or otherwise to the Management along with the bill for the items consumed in a hotel. The true character of tips cannot be treated as any payment made by the Management out of its pocket but a transfer of what is collected, to the staff as it is intended by the payer to be so distributed.

Therefore, the receipt of tips by the staff cannot be considered as anything like a payment made by the Management to its employees.

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