Four managers received $130,000 from tip pool as servers got flat monthly rates
An Ontario restaurant owner who took $40,000 from the employee tip pool while a worker in Europe received $23,037 has been ordered to pay $16,259 to two servers who challenged the distribution scheme.
Vice-chair Brian Mulroney of the Ontario Labour Relations Board ruled on Jan. 26, 2026 that Sultan Ahmet Turkish Cuisine in Mississauga violated the Employment Standards Act by failing to prove it had a valid tip distribution policy and by allowing management to receive roughly one-third of all tips collected between September 2023 and September 2024.
The board awarded $7,193 to server Korhan Teko and $9,065 to Shamuhammet Jumageldiyev after finding the restaurant distributed $130,037 to four individuals who either did not qualify for tip sharing or whose participation could not be verified.
Flat-rate scheme for tipping
The restaurant paid servers flat monthly amounts of $1,500 or $1,700 for working 170 hours, regardless of how much they actually earned in tips. Servers who generated $80,000 in monthly revenue received the same payment as those generating far less.
Teko provided records showing that in December 2023, he worked 200 hours and generated average hourly revenue of $399.54. The board noted he submitted "that, on nearly $80,000 worth of monthly revenue, he must have received substantially more than $1500 in tips from diners."
The board found this approach violated the fundamental principle that "tips or other gratuities are, prima facie, the property of the employee recipients." The decision noted: "The board finds as a fact that the monthly tip distribution figures demonstrate that the restaurant was distributing revenue and not tips."
Another Ontario employer is facing a $185,015 bill after incorrectly calculating an employee's overtime threshold and then terminating him for pursuing his claim.
Tips given to management
Owner Denesh Balar received $40,000 from the tip pool despite his extensive management duties that included financial oversight, franchise development, and social media monitoring. Head chef Ahmet Dogan, Balar's former business partner, received $40,000. Balar's wife Kristina received $27,000, though neither applicant had seen her working at the restaurant. An employee named Elena, who worked in a European country, received $23,037.
Neither applicant knew management was receiving tips until April 2025, when they received unredacted distribution records during the hearing process. As required by legislation effective June 21, 2024, employers must post policies allowing management to share tips, but the restaurant admitted it never did
The board found Balar ineligible because he did not "regularly performs to a substantial degree the same work performed by" tipped employees, as required under the Act.
A recent civil suit filed in B.C. Supreme Court against a Kamloops Denny’s restaurant serves as a warning for employers across Canada that rely on digital systems to pay and distribute tips and other payments to staff.
Tipping policy at restaurant
The board placed the burden squarely on employers claiming exemptions from tip distribution rules. The decision stated: "The Board concludes that requiring the Restaurant to prove that it had a policy in place at the relevant times and that it acted within the provisions of the policy is consistent with the Board's jurisprudence, as outlined above."
The restaurant failed to provide sales records, income statements, employment contracts, or T4s to verify the amounts it claimed to have distributed. Monthly tip collection and distribution figures never balanced, with discrepancies up to $6,000.
The board emphasized that the restaurant, in its unique position as paymaster, must show strict adherence to the statute and provide exact proof when withholding employee tips for redistribution.
