Malaysia is one of Asia's biggest employers of foreign labour. But recently, cases of deaths, abuse and forced labour have come to light. What is going on? Who is protecting these migrant workers?
BY V. ANBALAGAN, ASSISTANT NEWS EDITOR
The national union representing workers in the service industry said it will take employers governed by collective agreements to court if they stopped imposing the 10% service charge on customers.
National Union of Hotel, Bar and Restaurant Workers secretary-general Rusli Affandi said it was mandatory for employers to collect the tax which constituted part of its members’ wages.
“Employers must collect the service fee from customers or else they are breaching the collective agreement,” he told The Malaysian Insider.
Rusli said this in response to diners who questioned the 10% service charge after the 6% goods and services tax (GST) was introduced on April 1.
He said only about 12,000 employees in the service industry were union members but the total workforce in the industry in the peninsula numbered about 100,000.
Rusli said workers in this sector were paid between RM350 and RM1,200 per month and the service charge was collected from guests to top up their wages.
As a result of the service fee, workers took home an additional RM800 to RM1,500.
“The 10% charge will go into a fund and distributed to workers according to a formula set out in the collective agreement,” he added.
Rusli said without the benefit of the service charge, these employees would earn less despite the government having introduced the monthly RM900 minimum wage.
He said during the peak season, employers could collect between RM40,000 and RM100,000 in service charge.
“Out of the 10%, employers keep 1% for administrative charges and 9% goes to the employees.”
Service charge was introduced in the hotel industry to replace tipping to individual employees.
On Monday, Domestic Trade, Cooperative and Consumerism Ministry secretary-general Datuk Seri Alias Ahmad said with the introduction of GST, restaurants and hotels were no longer allowed to impose service charge unless they have employer-employee collective agreements in place.
He also said restaurants were required to display a notice if they wanted to impose service charges until the government decided on a way to regulate the collection.
Alias said those who did not have the agreement but still imposed the charges would face action under the Price Control and Anti-Profiteering Act or the Consumer Protection Act.
Meanwhile, lawyer Ragunath Kesavan said employers who have non-unionised workers were also entitled to collect the service charge provided the financial benefit went to workers as provided in the employment contract.
“The collection is not confined to employers who have entered into agreements with the national union. Employers can impose the charge on customers provided there is a clause in the terms of employment,” he said.
Ragunath, a former Malaysian Bar president, acknowledged that it was difficult to determine if all the collection went to workers or such charges were part of the employers’ profit.
Malaysian Trade Union Congress secretary-general N. Gopal Kishnam said the low income of workers in this sector was a classic case to demonstrate why the government should not have introduced the GST.
“The monthly EPF contribution of workers in this sector is low because the basic salary does not include the portion that comes from the service charge.”
Gopal said 40% of EPF contributors earned RM2,000 while 65% of households in Malaysia received RM3,500 a month.
“All earnings are used up for household expenses and they have no savings,” he said, adding that the 6% GST was a burden as the price of essential items had gone up.
Gopal said the consumption tax was only viable in an economy where the income of the people was high and every dollar earned had strong purchasing power.
“Singapore introduced GST in 1994 at 3% but today the earnings of its people are high and its currency is strong.” – April 11, 2015.
Source: The Malaysian Insider
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