Senate ratifies service charge measure

May 29, 2019

The Senate has ratified on Tuesday afternoon a measure that seeks to increase the percentage of service charges distributed to covered workers in the services industry.

"This proposed measure allows our frontline service workers to enjoy the fruits of their labor, the reward for providing good, quality service," said Senator Joel Villanueva, chair of the Senate Committee on Labor, Employment and Human Resources Development.

"We thank our colleagues in the Senate and in the House for passing and ratifying this measure," he added.

The senator said Senate Bill 1299 effectively amended Article 96 of the Labor Code of the Philippines which provides employees are entitled to only 85 percent of the service charge paid by customers in hotels, restaurants and similar establishments.

Villanueva, principal author and sponsor of the measure, said that rank-and-file and supervisory employees should receive 100 percent of the service charge collected.

Employees who are classified as managers, described as those "who lay down and execute management policies or to effectively recommend such managerial actions," are excluded from getting a share in the service charge.

If employers decide to abolish the service charge, Villanueva explained this will be addressed by Article 100 of the Labor Code of the Philippines which prohibits the diminution of benefits.

Villanueva then cited a data from the Department of Labor and Employment (DOLE) showing from 2014-2017, 621 out of 212,641 inspected establishments nationwide violated labor provisions on service charge after failing to show proof they distributed their collected service charge to their employees.

He underscored the need to legislate the proposal into law to give hotel and restaurant workers what is theirs for providing quality service to customers, and the proposal will benefit workers and employers. DMS