Directives regarding service charge imposed by hotels, restaurants and the services sectors had kept on changing through different government’s spokespersons, said the association in a statement yesterday.
SHA pointed out that not only are these statements confusing, but bear in mind that the law by the Labour Department differs for the same industry in Peninsular Malaysia and Sabah.
“The GST implementation and the issue on service charge are two different issues and to synchronize both into one, why was the service charge ‘issue’ not settled before the implementation of GST?
“Why is the focus shifted to the service charge? What impact has it got on the implementation of GST?”said the association.
SHA also said that since the early eighties, service charge has been slowly incorporated into the lifestyle of the people from the hotels into the restaurant industry and no one has complained on the matter as it is a matter of preference and choice.
It said that the hotel industry has always complied with the requirement to notify customers of their tariff rates, contract rates that the rate quoted is subject to a 10% service charge and 6% sales tax or that the price is nett and inclusive of 10% service charge and 6% sales tax. Nothing is hidden, whether it is the menu or other promotional materials.
“Since when then are there complaint(s) that such guidelines were not complied with and complaints lodged?”
According to the association, one official insists that there must be a collective agreement before any establishment can collect service charge, and has declared that all establishments are now in violation of the law unless otherwise indicated.
The Minister of Consumer Affairs was quoted on TV as saying that such establishments must have a valid certificate from the ministry before they are allowed to collect service charge.
“Can the ministry issue proper guidelines with immediate effect for the hotels and restaurants industry and the time frame allowed? Also, please advise where and how are the industry players going to submit their applications and how long would it take to process the applications.
“Are we moving forward or backwards?” asked SHA.
Domestic Trade, Cooperative and Consumerism Ministry secretary-general Datuk Seri Alias Ahmad recently announced that restaurants and hotels without a collective agreement between employers and employees are not allowed to impose service charges.
He said restaurants are required to display a notice if they want to impose service charges.
The service provider must explain the reason for imposing a service charge to the customer because the charge, which is an international practice, is beyond any control and bound between the customer and service provider, he said.
He also said it is the right of customers to decide not to pay service charges and there is no prescribed service charge rates.
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