KUALA LUMPUR (Apr 8): The Association of Hotel Employers (AHE) is questioning the Domestic Trade, Cooperatives, and Consumerism Ministry's decision to abolish service charges in the hospitality industry.

AHE president Christopher Raj said the 10% service charge had always been implemented in hotels and restaurants.

"Service charge has always been part of the wages of the employees. If you don't allow the hotels and restaurants to collect service charge, how are they going to operate? This practice has been around for such a long time," he said.

A report yesterday that quoted Ministry secretary-general Datuk Seri Alias Ahmad said restaurants and hotels could no longer impose service charges on their customers if they did not possess collective agreements with their workers.

He said the ruling was effective yesterday. Those who failed to  comply would be investigated under the Price Control and Anti-Profiteering Act 2011 and the  Consumer Protection Act 1999 (CPA), among others.

Raj said it was not necessary for hotels to have a union or collective agreements to collect the service charges.

"There are some hotels, which are not unionised that give appointment letters with a basic salary and service charge points. We cannot stop giving the service charge points because it will be a breach of the contract between the employer and employees,” he said.

Raj added that the collection of the service charge was part of the salary structure for most hotels.

He said the confusion that had been created would need to be cleared with the relevant authorities.

The association will soon be meeting with the Domestic Trade, Cooperatives, and Consumerism Ministry and the Human Resources Ministry to discuss the problem.

On the requirement by the ministry that all establishments must display signboards informing consumers of the service charge, Raj said that the hotels have already been implementing it for years.

"The service charge has always been displayed on our websites, brochures and flyers. Even when a guest checks into the hotel, the receptionist will inform them that there is a 10% service charge and 6% government tax for all bookings," he said. – The Malaysian Insider