Hotel staff were sharing spoils, but new order will spoil their party

Can't leave service charge to customer's discretion, say owners; fear attrition

The Centre’s directive which leaves it to the customer’s discretion to pay service charge is seen as an unwelcome and unnecessary move by owners and employees of restaurants in the city.

The industry was running smoothly with only a few customers raising issues about service charge, they say.

“The practice began because customers were not tipping well. The staff are dependant on service charge and this move will badly affect them,” said Ashok Sadhwani, member of National Restaurant Association of India. While owners pay the due salary, it is the duty of customers to pay the staff serving them, he said.

The service charge, usually 5% to 20% of the bill, is distributed among staff members once in 15 days or at the end of the month. From the cleaner to the chef, everyone receives a share depending on their seniority. The share is usually above Rs 3,000 a month for the lowest worker. This additional income is something the employees count on.

In fact, the service charge is a key factor in deciding which restaurant to work in.
“The industry is highly competitive. Poaching of employees is a common practice. If I decide not to collect service charge, another restaurant which does will use that as an incentive to draw away my employees,” said a restaurant owner who did not want to be named.

K Puttaswamy, president of Karnataka State Hotel Workers Welfare Association, also believes that the move is unnecessary.

“People hardly leave any tip. Sometimes, they only leave change which may be Rs 10 or Rs 20. The tips go only to the waiter, but the service charge benefits everyone, including those who wash the dishes,” he said.

“We will put up boards outside the restaurant saying we collect service charge. Let customers walk in only if they are willing to pay it.” This is the solution that most restaurant owners are thinking of. “If you leave it to the customers, they will choose not to pay. They do not understand how the hotel industry works,” Sadhwani said.
Phobidden Fruit, a Vietnamese restaurant in Indiranagar, has already stopped the practice of collecting the charge on January 1.

“The discussion about service charge is in the news for a while. Pre-empting the move, the owner decided to stop collecting the amount,” said manager Keith Thyagarajan.

Customers have, in the past, picked arguments with them. The decision was taken to keep them happy, he said. To compensate for it, the owner promised the staff a hike in salaries.