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KUALA LUMPUR: More than 90 per cent of hotels, restaurants and cafes in Malaysia are not unionised, giving them a free reign to do as they please with the service charge collected from patrons.
National Union of Hotel, Bar and Restaurant Workers, Peninsular Malaysia, general secretary Rusli Affandi said based on their estimation, only seven per cent, or 130, of 1,860 such establishments were registered with them.
“This means only these 130 companies can be hauled to court if they fail to pass on the collection to their unionised staff.”
Rusli said the seven estimation was generous as the real figure could be far less as many food and beverage outlets were not included in the overall number of the establishment due to their sheer number.
“The others enjoy the privilege of collecting and choosing what they want with the money and this includes pocketing its full sum as a profit.”
He said under the terms of standard collective agreement, 90 per cent of service charges were passed on to staff, while the remainder went to the establishment.
The union receives reports and audits on the collection of the service charge and its allocation to staff from members.
However, Rusli said, the imposition of the Goods and Services Tax (GST) and the controversy about such establishment imposing service charges without proof that the benefits were being passed on to their workers had a positive impact.
He said their office lines were flooded with calls from those wanting to sign up as members after the Domestic Trade, Cooperatives and Consumerism Ministry announced on Monday that the restaurants and hotels without collective agreements with their workers were temporarily banned from imposing service charge on their customers.
“Despite the occasional abuse, I hope that the government will retain this charge as a large number of hotel workers earn between RM350 and RM700 which is below minimum wage. The service charge is what helps them earn a few hundred extra,” he said in response to growing calls by consumers to scrap the service charge, which they deemed burdensome and confusing with the implementation of GST.
Former food and be erage outlet operator Datuk Mumtaz Ali said the move would be unwise as it was used to defray labour costs.
“Taking the service charge away is unwise as operators would resort to marking up their prices to give their workers a cut.
“Those without collective agreements, if the authorities find them genuinely passing on the collection to their workers, should be given the green light to continue imposing the charge.
“The focus should instead be on cracking down on profiteering in every hotel, restaurant and café. Each on of these establishments should be monitored.”
Federation of Malaysian Consumers Associations president Datuk Dr N. Marimuthu said the system should be scrapped as there was a minimum wage, which was constantly reviewed.
He said there was much confusion, with many restaurants charging GST on the total bill, including the service charge.
Marimuthu said Malaysians could instead opt to tip for good service.
A check in the Klang Valley found that a number of restaurants and outlets were still imposing service charges.
When asked, some food operators claimed they would continue charging the tax until the government gazetted and issued guidelines on the new ruling, while others claimed they were sorting out the system to remove the charge, which was automatically computed.
“The ruling is new, so we are still adjusting. Just like GST, we will take it one day at a time,” said a restaurant operator.
Meanwhile, GST specialist Choong Hui Yan said service charge would face issues when doing their taxes as they would have to channel their GST collection to the Customs Department, and the leftover service charge has to be declared to the Inland Revenue Board, with the dues chargeable under income tax.
Source: New Straits Times
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