A decision on the 10 percent service charge imposed by hotels and restaurants is expected to be made on Monday, following a meeting between the government and food and beverage (F&B) players and other interested parties.

Restaurant and hotel operators are expected to collect the service charge and distribute it to the employees as an incentive payment. But whether or not the money reaches the staff or remains in the hands of their employers is another question altogether.

Following the recent public outcry over the service charge, the Domestic Trade, Cooperatives and Consumerism Ministry announced that restaurants and hotels could impose the service charge only if they have a collective agreement with their employees.

Ministry secretary-general Alias Ahmad said they are also required to display a notice on the service charge at their premises.

Many consumers have urged the abolition of the service charge and suggested that tips be offered, instead, to the deserving staff.

National Consumer Complaints Centre board of trustees member Muhammad Sha’ani Abdullah ( right ) said he prefers the service charge over tipping, as the former is more efficient and systematic. He said the tipping culture may result in workers only choosing to serve customers who, they feel, would be able to give tips.

“If a waiter feels that a certain customer may not be able to afford generous tips, he or she may not serve the customer well. Customers who appear wealthy will receive preferential treatment.

“This is the reason the hotel sector does not practise tipping as it doesn’t want its employees to only go after the big fish... we don’t want this to happen,” he told Bernama .

He said tipping is also seen as unfair because only those in the “frontline” are rewarded.

“What about the workers at the back of the restaurant, like the cooks, dishwashers and others? They, too, contribute to the service but don’t get the chance to receive tips,” he said.

Muhammad Sha’ani said the service charge, on the other hand, could be accumulated and distributed to all the employees at the end of the month, based on their performance and total points acquired by them.

“If a worker is good and has a high number of points, he will be entitled to a bigger portion of the reward. Those with lower points will get smaller amounts,” he said.

He said the onus is on employers to draw up collective agreements with their employees and distribute the service charge to them.

“The collective agreement must outline clearly how the service charge should be distributed to the staff. This is to make sure that the money goes into the right hands,” he said.

Muhammad Sha’ni said if the service charge is abolished, restaurant workers would only be able to take home their minimum pay of RM900.

He also said that in the case of food ordered online, service charge should not be imposed if both the goods and services tax (GST) and delivery charge have been included in the bill.

He added that the confusion over the service charge would not have arisen if the public had a clear understanding of the GST.

“Since the implementation of the new tax, many people have been disputing the service charge... this shows that consumers are not that well informed about the GST.

“At the same time, consumers have not been trying to understand the concept of the GST and existing market practices,,, furthermore it’s service ‘charge’, not tax,” he said.

“It’s not so important to change the term because it’s used worldwide... if we change the term, then it looks as if we are the only ones who don’t understand the mechanism practised all over the world.

“However, restaurants should be monitored closely to ensure that they don’t impose too high a service charge,” he said.

Consumers, too, could play their part by boycotting restaurants that imposed exorbitant service charges as this would compel them to review their charges.

Fix a low rate

Consumer Protection Society president Mohd Firdaus Abdullah, however, wants the service charge abolished, saying that food and hotel prices are already high.

He said it is unfair for consumers to be forced to “pay extra wages” to hotel and restaurant employees through the service charge, all because their employers are reluctant to pay them higher salaries or incentives.

He said in the event the service charge is retained, the government could create a win-win situation by fixing the service charge for F&B outlets and hotels at a rate affordable for consumers.

“The government can discuss the matter with the relevant parties to find a solution... perhaps, the service charge can be fixed at below 4 percent or 5 percent,” he said.

Mohd Firdaus said since many workers in the hotel and F&B industries, like cooks, waiters and cleaners, comprise foreigners, probes should be carried out to ensure that the service charge is channelled to them.

“We don’t know how transparent the employers are. Are they taking advantage of their foreign workers by denying them their right?

“Action should be taken against those who don’t distribute the service charge in full to their workers... this is why it’s important to have a collective agreement,” he said.

Mohd Firdaus said being a competitive industry, restaurants and hotels which impose steep service charges may find their customers leaving them.

“They would prefer to patronise places that don’t levy service charge... if operators really want to impose such a charge, why not fix it at a low rate,” he said.

- Bernama