When the ban on service charges in non-hotel restaurants was implemented, it was intended to protect consumers. However, the unintended consequences of this action may result in many employees unable to live on their monthly wages. As The National reported on Monday, restaurant staff are leaving their jobs as a result of lost income since the removal of the service charge. The problem lies mainly with management practices. Service charges were appropriated by the company and only a portion given to the staff. Now, these employees are complaining that around 40 per cent of their income has been lost as a result of the ban. It is disturbing to note that the loss of a 10 per cent charge on a bill could so impact these employees, and perhaps indicates that they were too poorly paid in the first place.
Much of the service charge was used for operating costs and for staff benefits (a rather nebulous term). What should have been funded by the simple sale of food and beverage was instead provided through money meant to reward good service. As a result of this flawed business model, many restaurants are scrambling to recoup lost income by raising food prices or passing on the loss to their employees. The former is a natural reaction; the latter is unjust and unacceptable.
Certainly, restaurants will have to do something soon to retain their staff. To some extent unskilled labour is replaceable in the UAE, but bringing over and training new staff requires time and money. On a more basic level, the management has no right to divert money intended for the waiters for their own ends. Should the restaurants not set prices that allow them to operate without fleecing their employees, then the authorities must step in. This is not simply a matter of ensuring that workers get a fair wage for an honest day's labour, although that is undoubtedly important. The UAE desires a thriving tourism industry, but who will come if they cannot have a pleasant meal provided by attentive waiters?