Saturday, August 02, 2014

Victory for hotel employees - Minimum Wages does not include 'service charge'

For employees of hotels and many restaurant, over and above their salary (which is rather low), they also get 'service charge' . In Malaysia, there is usually no 'tips' - but there is service charge, being normally a percentage over and above the  payments made by customers for their hotel stay, food, drinks, etc.. (it is clearly stated in your bills). Now service charges are payments made by the 'customer' and not the employers - but alas, many employers still take a percentage of this for their services of administering these moneys of the workers. 

Now with minimum wages becoming a right in Malaysia, some of these employers tried not to increase the basic wages of workers to the required minimum wages of RM900, but tried to include 'service charge' in their computation of minimum wage. Of course, hotel employees and their unions were not happy. (See the link below to understand more about service charge...).

This recent court judgment settles this issue -   employee shall be paid the minimum wage, as per the Minimum Wage Act which came into effect last year, on top of the service charge.

The news report is misleading, the Union that took up the case and won, I believe, was The National Union of Hotel, Bar and Restaurant Workers (NUHBRW) not the Malaysian Trade Union Congress(MTUC). The report really should name and credit this Union who took up the struggle and won. [Will try to get the Judgment and upload it..]

Union wins landmark case for minimum wage

PETALING JAYA: The Malaysian Trades Union Congress (MTUC) applauded a recent landmark judgment handed down by the industrial court on a hotel's employee salary structure.

Its president, Mohd Khalid Atan, told theSun today that the decision made last month is a precedent which should be followed by others in the hospitality industry.

In the written judgment, the court held that an employee shall be paid the minimum wage, as per the Minimum Wage Act which came into effect last year, on top of the service charge imposed.

In addition, the court also decided that the hotel would retain 10% of the total service charge imposed on all its monthly bills and the remaining 90% will be fully distributed to all employees covered within the scope of the decision made.

The case arose because there was a salary dispute between the two parties – the hotel and the employees.

The employees had insisted that their salaries be structured in line with the Act and be separated from the 10% service charge imposed on billings to customers.

According to the written judgment, with effect from Oct 1 last year, every employee shall be paid according to the new outlined salary structure except for part-timers, temporary, casual and retired employees.

It also stated that the minimum wages should be implemented with immediate effect as the hotel is a member of the Malaysian Association of Hotels (MAH).

The decision follows after the Act came into effect last year with the implementation of the minimum wages of RM900 in Peninsular Malaysia and RM800 in East Malaysia.

The union's industrial relations adviser Lim Chooi Phoe said he was glad because the employees are benefiting from the outcome.

He believes that currently there are 24 hotels nationwide facing the same problem regarding salaries which are being brought up to the industrial court.

At press time, MAH and Malaysian Association of Hotel Owners (Maho) could not be reached for comments on the matter - The Sun Daily, 31/7/2014, Union wins landmark case for minimum wage -

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