Recent service charge in Malaysia: For some, it's their bread and butter

Recent service charge in Malaysia: For some, it's their bread and butter
Read before you eat: A notice pasted on a wall stating that a 10 service charge and 6 GST will be included in the bill at a restaurant in Kuala Lumpur.

With the GST already eating into the income of households, consumers are cheering eateries that do not impose a service charge. And, for outlets that do, their workers have to put up with complaints from unhappy customers. Three of our reporters share their experience of dining at different restaurants in the Klang Valley.

A Bistro in Section 17, PJ

We went to this popular mid-priced bistro on Tuesday and ordered a pot of chamomile tea which cost RM6 (S$2.20). So with 6 per cent GST, it would have cost RM6.36 but the bill came to RM7 instead, inclusive of a 10 per cent service charge (60 sen) and 6 per cent GST (40 sen).

We told the waiter we did not want to pay the service charge and would pay RM6.36 for the price of the tea and GST.

The bistro manager came out and said they were entitled to impose the 10 per cent service charge as it was the "cost of serving" the customers.

There was no sign indicating the 10 per cent service charge but the manager showed the fine print in the menu which mentioned the charge.

The manager had no idea what a collective agreement was.

He thought it was an agreement between "the Customs Department and businesses that have registered with GST".

"You can look it up in the Customs website. It is not between the employer and employee," he said.

A famous cafe chain

Here, they only charged customers the 6 per cent GST.

But the owner said she would consider raising the price of the food to cover the 10 per cent service charge they had lost.

"We decided not to charge the service charge because we do not want any trouble with the Government.

"The price of the food has gone down since we waived the service charge but we are feeling the pinch now because we still have to pay the workers' salaries," she said.

A waiter at the cafe said they had a bowl for the customers to leave their tips.

"The boss splits the amount every month and we get at least RM70 each."

A local restaurant franchise

Ignoring the current ban by the Domestic Trade, Cooperatives and Consumerism Ministry on outlets that don't have a collective agreement (CA) with their workers, some local restaurant chains are still imposing a service charge on their customers.

One in Mutiara Damansara has a notice to inform customers that they will have to pay 6 per cent GST and a 5 per cent service charge.

"The service charge is for our employees," said the restaurant manager who just called himself Harun.

He said the service charge collected was shared equally amongst the non-managerial staff.

When contacted, one of the franchise directors, who only wanted to be known as Farhan, revealed that the company was going to waive their service charge.

Farhan, 37, said the bills would continue to show that a service fee was charged, but assured customers that they would get a refund for service charges paid.

"We will require some time to reconfigure the point-of-sale (POS) systems at all outlets to remove the service charge portion in bills," he said, adding that the Government's announcement came as a surprise, thus not giving restaurant operators enough time to react.

"Since last night, we've had customers refusing to pay the charge. Some even walked out without paying the whole bill."

Farhan, who has been working in the food industry for the past six years, said the announcement was "very unfair" to operators.

"We spent thousands and thousands (of ringgit) to reset our POS system - first when GST was implemented; now for the service charge," he said.

Farhan added that many industry players were unsure what a CA was, let alone its format.

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