Some people do not tip at all so I am sure they were unhappy about the higher prices. Did the restaurant raise wages at or above the level their top employee was earning with tips? If it was a cent less than that i can understand why employees were unhappy.

There is immense cultural momentum behind tipping culture.

Where I live it is common to have a 15+% gratuity added to the tab automatically and then an optional extra tip that goes to the full staff. This seems to be a reasonable compromise.