Prov’l dad hits P2M accumulated service charge due for Ilocano employees of Plaza del Norte

By Leilanie G. Adriano

Staff reporter

Laoag City—A private firm managing a government-owned hotel and convention center at Brgy. Balacad, this city has been called to appear at the Sangguniang Panlalawigan on May 21 to explain an alleged violation of the Labor Code of the Philippines (LCP) particularly on the distribution of about P2 million accumulated service charge due to its 90 local employees.

Citing Article 96 of the LCP which states, “all service charges collected by hotels, restaurants and similar establishments shall be distributed at the rate of eighty five percent (85%) for all covered employees and fifteen percent (15%) for management, Sangguniang Panlalawigan member Vicentito “Toto” M. Lazo bared that Cafe Ayuyang, a bar and restaurant at the provincial government-owned Plaza Del Norte (PDN), which is currently being managed by 88 Green Inc. has been collecting at least 10 percent service charge to its customers but the share due to its covered employees is not paid in cash but in kind.

In a privilege speech delivered by Mr. Lazo at the Sangguniang Panlalawigan session hall, he brought out a complaint of some PDN employees saying employees are compelled to avail the services of PDN as service charge share.

In other words, Lazo said, “If an employee wants to spend the night in PDN, then it is deductible from the service charge due to the employee. If the employee wants to celebrate his birthday party at Cafe Ayuyang or maybe at the bar, it’s deductible from their share of the service charge.”

“This is outright illegal because under the law also, in so far as the benefits of the employees are concerned, it should not be given in kind but in the form of legal tender,” Mr. Lazo said citing Article 102 which states that it should be paid by way of legal tender, even when expressly requested by the employee.

On the part of the PDN management, the service charge due for its employees is paid by way of availing the services of the hotel and restaurant. As of press time, the management have yet to make an official statement regarding the issue.

“To add insult to injury, assuming you have a group of 12 people because the celebrant invited 11 guests, when he will order, one crispy pata will not be enough for the 12, so he would order two. What PDN does is he will inform the employee that he can only order one for that evening,” Mr. Lazo added.

In view of this, Mr. Lazo said he along with some members of the provincial board who went at the coffee shop called the attention of the resident manager, Rolando Lawas to correct this practice as he underscored PDN is owned by the provincial government and the members of the board do not tolerate any violation of the law.

However, following Mr. Lazo’s next appointment at Cafe Ayuyang with his son, he discovered in the receipt issued to him that the 10% service charge as indicated below the order menu cover has been removed in the official receipt compared to his previous receipts.

“When I was going there, there was a 10% service charge in the receipt. I presumed that the 10% service charge was removed by the management in order to avoid giving to the employees their accumulated share of service charge which at the time we went [last month], the accumulated service charge amounts to P2 million. Now, Lawas may have been ill-advised,” he explained.

In case the service charge was abolished, the law clearly states the share of the covered employees shall be considered integrated in their wage.

“That is quite a substantial amount. Lawas is escaping this and worse, they try to circumvent the law by removing the 10% service charge in the receipt despite the fact that their menu says that they are supposed to charge 10% service charge,” he stressed.

Considering the minimum penalty in violation of the labor law which is P1,000 but not more than P10,000 fine or imprisonment of not less than 3 months to 3 years or both, Mr. Lazo said the management of 88 Green cannot exploit their employees, who are all residents of the province by withholding the accumulated P2 million worth of service charge and compelling them to patronize PDN so that they can collect their service charge share in kind.

To shed light on the issue, Mr. Lazo’s privilege speech was endorsed to the committee on labor while the PDN management along with its Human Resource Department and some employees, including a representative of the Department of Labor and Employment will be invited to attend the committee hearing at the session hall on May 21 at 2p.m.