A NUMBER of major hospitality establishments are committed to implementing the new rules that expand the distribution of service charges to casual, contractual, and agency-hired employees.
They added that they would find other ways to retain their efficient regular employees despite the lowering of their take-home pay, as more non-regular workers get a share from the service charges collected, as provided in the Department of Labor and Employment’s Order 242-2024. The department order implements Republic Act 11360, the Service Charge Law, enacted in August 2019. (See, “Service charge must not be used as ‘reward’ to keep good hotel staff—DOLE,” in the BusinessMirror, March 5, 2024.)
In an interview on the sidelines of The Westin Manila’s launch of its new restaurant Cantabria, Barun Jolly, Senior Vice President of Robinsons Hotels & Resorts (RHR) said, “Of course we will implement [the new rules] in the right spirit and make sure that all the listed beneficiaries get the service charge.” To assist them in monitoring the actual number of hours worked by the casual and contractual employees, “We will have automatic time keeping,” he said. Only 30-40 percent of the hotel group’s employees are non-regular employees.
RHR is the hospitality arm of the Robinsons Land Corp. and operates 29 properties including The Westin Manila; NuStar Resort and Casino, Fili, and Dusit Thani Mactan in Cebu; Crown Plaza Manila and Holiday Inn Manila Galleria; Grand Summit Hotels; Summit Hotels and Resorts; Go Hotels and Go Hotels Plus.
Competitive pay
In an email, John Rice, VP Operations for Southeast Asia and Australia of the Shangri-La Group said, “All eligible members of our workforce in the Philippines will receive their respective service charge allocation. As always, we strive to maintain a competitive remuneration package for our colleagues.”
He declined to say how many casual/contractual employees would be affected by the new implementing rules and regulations (IRR) of the Service Charge Law. “Our operations in the Philippines remain unchanged at present but we will continue to closely monitor the business environment.”
The Shangri-La Group manages five properties in the country: Makati Shangri-La, Shangri-La The Fort at BGC, Edsa Shangri-La at the Ortigas Center, Shangri-La Mactan in Cebu, and Shangri-La Boracay.
For her part, Cleofe C. Albiso, Managing Director of Megaworld Hotels and Resorts (MHR), said the new IRR “does not affect us as a group. We have not been collecting service charge since 2019.” MHR is the largest hospitality chain in the country with some 7,700 room keys under Savoy Hotels, Richmonde Hotels, Belmont Hotels, including independent brands, such as Hotel Lucky China Town, Kingsford Hotel Manila, Twin Lakes Hotel, and Grand Westside Hotel.
Incentive scheme as alternative
So far, only I’M Hotel in Poblacion, Makati has announced the removal of its service charge, on the day the new rules came into effect. According to Atty. Jose Manuel “Chel” I. Diokno, chairman of the Free Legal Assistance Group, it was unfair for hotels, restaurants, and similar establishments to remove the service charge, and violates the SC Law. “It is a basic rule that any benefit enjoyed by the employees cannot be reduced or discontinued by the employer,” he added. (See, “Hotels, restos violate law if they remove service charges–Diokno,” in the BusinessMirror, March 11, 2024.)
A manager of a hotel in the Visayas said on background, “Sharing [the service charge] is not the issue, but [DOLE] should have first studied how it should be implemented. That’s why I understand why other hotels moved away from the SC and instead, implemented an incentive scheme, which will have performance metrics. [However] incentives can be subjective and discretionary.”
The source added, while his hotel will still be implementing a service charge, the new DOLE rules open up the industry to “undiscovered territory. The associates might be demoralized. If a hotel goes the way of an incentive scheme [in lieu of implementing a service charge], it needs to formulate programs that will need some time to put together. And obviously, not everyone will get a fair share.”