HOTELS and restaurants violate Republic Act 11360, the Service Charge Law, if they remove the levy from their guests’ bills.
In an email, Atty. Jose Manuel “Chel” I. Diokno, chairman of the Free Legal Assistance Group and founding dean of the De La Salle University College of Law, told the BusinessMirror: “Hotels, restaurants, and similar establishments cannot just decide to remove all service charges–doing so would violate the principle of non-diminution of benefits. It is a basic rule that any benefit enjoyed by the employees cannot be reduced or discontinued by the employer.
Diokno said this in response to reports of several hotels and restaurants deciding to remove their service charge, after the Department of Labor and Employment issued revised implementing rules and regulations to the Service Charge Law.
While many restaurants remain unaffected by the new IRR as they hire only regular employees, a number of hotels, especially those operated by large hospitality chains, are staffed by casuals and contractual employees, a number of whom are hired through third-party employment agencies. (See,Industry sources estimated that casual/contractual employees can reach as high as 80 percent of a hotel’s total workforce.
The Philippine Hotel Operators Association said the implementation of the new IRR will reduce the take-home pay of regular employees by 30 percent to 40 percent. The group, however, signed off on the new rules, according to Laguesma.