Contractual workers in hospitality sector should get share in service charge distribution -- Villanueva

The Service Charge Law intends to distribute fully the fee collected from restaurants, hotels, and resorts, among other establishments, to workers who provide the service regardless of whether their employment status is regular or contractual, clarified Senator Joel Villanueva, the measure's principal author and sponsor.

While thanking the Department of Labor and Employment (DOLE) in finally promulgating the implementing rules and regulations (IRR) of the law, Villanueva also called on the department to amend the definition of "covered employees" under the IRR which sought to remove contractual workers who render service in covered establishments from having a share in the service charge collected. According to Villanueva, this is to make the IRR consistent with the spirit of the law.

"The IRR should reflect the spirit of the laws. It must not modify or amend the law," Villanueva said in a statement. "In its current form, the IRR of the service charge law conveniently left out contractual workers in the hospitality industry, which runs against the spirit of the measure."

"We wrote the law to reinforce the right of covered workers providing service in the hospitality industry. Rank-and-file, supervisory and contractual workers directly providing service in hospitality establishments must get their equal share of all the service charge collected from customers," continued the senator, who chairs the Senate Committee on Labor, Employment, and Human Resources Development.

He lamented that the IRR, which Labor Secretary Silvestre Bello III signed on Nov. 19, perpetuates the "continued oppression of contractual workers," which the senator sought to rein in at the very least with the law, numbered as Republic Act No. 11360 that amends the provision of the country's Labor Code on the distribution of service charge.

Prior to the amendment, which President Duterte signed into law on Aug. 7, 2019, covered workers shared among themselves 85 percent of the total service charge collected by restaurants, hotels, and similar establishments. The remaining 15 percent went to the management which purportedly used the amount to cover instances of breakage and pilferage, among others.

But in the bicameral conference proceedings on the measure, lawmakers contended that the very nature of the service charge clearly pertains to the act of providing service, and not anything else, according to Villanueva.

Thus, the members of the bicameral conference committee unanimously agreed to phrase the law to state that 100 percent of the service charge collected to all covered workers who rendered the service, the senator recounted, adding that the collective sentiment of the body was to "give all these workers what is due to them."

Villanueva appealed to the labor department to revise the IRR to "stop another injustice against contractual workers" reiterating that it will not result in diminution of benefits to those already receiving the service charge because "what is to be divided among those who served is the entire amount and not 85 percent of it."

He also asked the DOLE to settle the misconception on the exclusion of managerial employees from the distribution of service charge by explaining further the provision to industry stakeholders.

At the bicameral conference hearing on the measure, DOLE representatives explained the distinction among the different types of managers, and it was clarified that only the top-level managers who fit the description of managerial employees under the measure were excluded from the distribution of service charge, recalled Villanueva.

Employees classified as managers are those "who lay down and execute management policies, or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions," according to the law.

"DOLE representatives also pointed out that first-level managers do not usually possess these kinds of authority in organizations. The IRR should be able to clarify this provision," Villanueva said. "We also reiterate that the law explicitly states that nothing in it shall result in the diminution of existing benefits under present laws, company policies and bargaining agreements."