Wahaca in Kentish Town Road triggered a backlash after it docked a waiter’s pay because a customer had run off without paying.
Former Camden Council leader Sarah Hayward tweeted the restaurant chain and its founder Thomasina Miers OBE after witnessing the apparent injustice on Saturday night.
An outcry ensued with hundreds commenting, forcing the chain to reimburse the waiter and "clarify" its policy.
Now there will be a full investigation into whether staff were "complicit in the walk out".
Tweeting on Saturday night, Ms Hayward wrote: "Hi @wahaca just eaten in your Kentish Town restaurant for the last time. Ppl next to us left without paying and their server is made to foot the bill from his wages. Apparently company policy. Utterly shameful employment practice. Food's great, company is crap."
MasterChef winner Ms Miers responded to the restaurant's detractors saying: "Guys, it is absolutely not standard policy for waiters to be deducted, only in cases of total negligence which this certainly does not seem to be.
"We are a company that looks after our staff and I am very proud of this. This waiter has unfortunately not understood the policy."
People were quick to comment, with one asking: "What constitutes a 'case of total negligence' on the waiter's part?"
On Monday, Ms Miers thanked Ms Hayward for raising the issue: "Always good to stick up for people's rights...we like to champion our people, not diddle them. So thank you," she said.
Ms Hayward told this paper: "I'm delighted Wahaca seem to have acted to clear up and tighten their policy.
"But the reaction showed this practice is widespread in the restaurant sector - so employers need to treat their staff better and I think the practice of docking wages should be outlawed."
A Wahaca spokesperson said: "We realise that our policy on how to deal with this has not been clear enough and we apologise to our teams for this.
"In situations of a walkout, whilst the waiter is responsible for the table they will not have to pay any element of the bill.
"However if the manager suspects the waiter was complicit in the walkout then there should be a full investigation."
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