Dubai: Many restaurant managements pocket the service charge customers pay instead of giving it to their staff although this is against industry best practices, Gulf News has learnt.
The Ministry of Economy has declared that imposing a service fee is illegal, and that it will soon come up with a bylaw to prevent outlets from charging customers the extra fee.
Restaurant patrons who spoke to Gulf News said that when they do not leave tips, they expect the service charge they pay will benefit the staff, which is not always the case. Some outlets claim part of the service charge while others do not pay a penny to their staff.
"I am a hotel employee and my concern is to inform the public that the service charge that is taken from our guests is not given to the staff," said Jo Poj (name changed on request).
"Some of the hotels and restaurants give part of the service charge to the staff [around five to eight per cent only from the ten per cent] which I think is not fair because the guest thinks that the full 10 per cent is given to the staff," Poj said, adding that the real beneficiary of the charge is the owner himself because it goes into his pocket.
Hidden charges
Another waiter, who works in a restaurant in the Mall of the Emirates, said his employer pays him a mere 1.5 per cent out of the 10 per cent service charge.
When Gulf News raised the issue with some restaurant owners they said there was no law regulating the distribution of the service charge.
Robert D'Sa, General Manger of Caesar's Restaurant group said: "We incur a lot of hidden charges like breakages and damage of crockery. There are also instances when we have to replace dishes when customers are unhappy. We cover all these expenses using the service charge since we cannot deduct the salaries of our staff."
According to him, customers do leave tips even if there is a service charge, and a waiter makes anything from Dh800 to Dh1,000 on top of his salary.
Varghese T.L., area manager for the India Palace Restaurants division, said they use the service charge for staff training and welfare purposes.
"The service charge goes to the staff welfare fund which is used for monetary assistance in case of an emergency. It is also used to provide training for our staff."
He added the restaurant has a pooling system for tips which is evenly distributed among all staff once a week.
"Our waiters make up to Dh1,200 a month, which is as much as their monthly salary," said Varghese.
But industry experts maintain that the service charge should rightly go to the staff although there is no binding regulation on this.
"As a best practice, at least 80 per cent of the service charged levied should go to the staff. Some hotels follow a point-based system wherein staff at different levels have different points, and a certain percentage of the service charge will be assigned for each level," said Kuruvilla Samuel, a hospitality consultant based in India.
