City officials requested restaurants and other food serving establishments in the city to post a notice indicating that the said businesses are charging service fees from their customers.
Under Resolution No. 007, series of 2023, local legislators stated that charging an additional amount for services rendered is so disappointing to customers or diners, especially if done without prior notice or information to them.
The said notice shall be written in bold letters printed on a signboard large enough to catch the attention of the diners and posted on a conspicuous place within the premises of the establishments.
The council asserted that the charging of service fees without informing their customers is an unfair practice under the law which needs to be immediately corrected.
The body defines a service charge as an amount that is added to a bill for any work or service rendered and it is paid by the customers directly to the company and not to the crew or staff.
Article 96 of Presidential Decree (PD) 442 or the Labor Code of the Philippines provides that 85 percent of the total service charge collected by establishments shall go to the employees while the 15 percent will go to the management.
Further, the same was amended by Republic Act (RA) 11360 so that service charges collected by hotels, restaurants and other similar establishments be distributed in full to all covered employees.
The New Service Charge law mandated all establishments collecting service charges such as hotels and restaurants to distribute complete and equal or 100 percent service charges to all employees, except those in the managerial positions.
However, the council admitted that there is no law specifying a minimum or maximum amount of the percentage of service charge.
Moreover, RA 7394 or the Consumer Act of the Philippines was enacted to protect the rights and interest of the consumers and to prevent deceptive and unfair acts of unscrupulous businessmen like adding service fees to the bill of their customers.
Copies of the approved resolution will be widely disseminated for the information and appropriate of all the concerned stakeholders.