Dear Editor,
Response to The Straits Times Article on Service Charge
We refer to the article by Mr Ho Kwong Ping, "Making the service charge work" (20 October 2010).
In 1978, the Ministry of Manpower (then Ministry of Labour) announced that tipping was discouraged and recommended a service charge.
The tripartite partners at that time supported the service charge because its distribution would benefit both front and back-end workers. The partners also encouraged a service charge of 10% in response to the varying levels of service charge in the industry. This also provided income stability for workers.
It is therefore inaccurate that unions entered into an agreement in the 1980s with hotel owners for a rapid rise in wages in exchange for owners keeping the service charge.
Service charge has been shared with hotel workers in different ways based on negotiation between the union and hotel. For example, 53% of unionised hotels share the service charge through a point system where rank-and-file workers are remunerated based on the job holder's extent of customer interaction. The rest of the unionised hotels practise a consolidated wage system where service charge is incorporated into workers' wages.
We recognise the importance of a sustainable service culture. This is evident from the numerous training and productivity-related initiatives that hotel employers and union have been working on to enhance and upgrade workers’ service standards.
A recent example is the partnership between hotels and union in sending workers for the Service Excellence Training programme offered under the WSQ framework. Workers should also be rewarded through a system of profit and productivity gains-sharing initiatives. This ensures that business and wage growth are both sustainable and inclusive.
Mr. Tan Hock Soon
General Secretary
Food, Drinks and Allied Workers’ Union (FDAWU)
Ms. Margaret Heng
Executive Director
Singapore Hotel Association
Mr. Koh Juan Kiat
Executive Director
Singapore National Employers Federation
