Displaying of service charge signage to be made compulsory, says ministry

The Domestic Trade, Cooperative and Consumerism Ministry is in talks with the Attorney-General (AG)'s Chamber about making the display of signage stating that service charge is charged in a premises compulsory.

The ministry's secretary-general Datuk Seri Alias Ahmad said this is an interim move until a new policy on service charge is formulated by the government.

"The ministry is in the process of regulating the service charge. Now my officers are in talks with the AG's Chambers about regulating signage in all premises.

“If this is approved by the ministry, we will let you know whether it is compulsory to display the signage. This is an interim move.

"As there is no policy on service charge at the moment, we want to ensure that premises display the signage so that consumers can have a choice."

He said the decision by the government last week that all the premises that wish to charge service charge has to have collective agreement between employers and employees as this is a universal practice in the hotel sector.

"In the universal practice, there is collective agreement. Therefore all the hotels or those who impose this have to have collective agreement.

"No other agreement except the collective agreement applies. If any premises wishes to stay out of the system, it has to change its wage and allowance structure."

Alias said that collective agreement involves union, and the employers are encouraged to change the wage structure of the employees.

However, he added that in the context of Malaysia's system, there was no law to regulate and to monitor service charge. This involves other ministries, including the ministries of Human Resources, Finance and Tourism, he said.

"We will have a meeting this week, I've set up a working group at the ministry level to talk about GST and other issues that came up. We will have inter-agencies meeting. The government will continue making every effort to look at this issue, and hope there will be an outcome soon."

He said that the ministry began to take the initiative to look at the issue of service charge after consumers voice out their dissatisfaction.

As at April 12, a total of 336 complaints, or 8%, out of the total 4,023 complaints received by the ministry were made on the 10% service charge. – The Edge Markets, April 13, 2015.