Republic of the Phili
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

15* CONGRESS

“Esty
ae

HOUSE BILL NO.

Introduced by Representative ARNEL U. TY

EXPLANATORY NOTE

This bill seeks to amend the provisions of the Labor Code particularly Article 96 thereof
which provides that all service charges collected by hotels, resiaurants and similar establishments
shall be distributed at the rate of eighty-five percent (85%) for all covered employces and fifteen
percent (15%) for management,

Section 3 Article 13 of the Constitution guarantecs full protection to labor, and the policy
of the law is to favor the welfare of the working class in recognition of the plight that they
endure. The Constitution lists the seven rights of workers namely: the right to self-
organization, collective bargaining and negotiations, peaceful concerted activities including the
right to strike in accordance with law, sceurity of tenure, humane conditions of work. right to a
living wage and the right to participate in policy and decision-making processes affecting their
rights and benefits.

But among these rights, the right to a just share in the fruits of production and to a living
wage occupies a much higher priority.

In the hotel and restaurant industry, service charges are almost universally collected, such
that Article 96 of the Labor Code even provides for its manner of distribution. But it is a sad to
note that many employers collect service charges but do not distribute them to employees, or
take a lion’s share of its proceeds in violation of the law. What makes it worse is that the law
itself provides for a share for employers when it is the employees of these establishments who
actually provide the service. The employers not only profit from the sweat and talent of these
workers, but also from the goodwill that they create because of their excellence in service.

To address this situation, this bill aims to give to the employees of these establishments
what is rightfully theirs. The Constitution charges the State with the responsibility of regulating
the relations between workers and employers, recognizing the right of labor to its just share in
the fruits of production. The passage of this bill shall allow it to do so. Approval ig therefore
earnestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

15" CONGRESS

HOUSE BILL NO.

Introduced by Representative ARNEL U. TY

AN ACT
AMENDING PRESIDENTIAL DECREE NO. 442,
ENTITLED “THE LABOR CODE OF THE PHILIPPINES”

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Article 96 of Presidential Decree No. 442, as amended, otherwise known
as the Labor Code of the Philippines, is hereby amended to read as follows:

Art, 96, Service charges. All service charges collected by hotels, restaurants and
similar establishments shall be remitted in full to ail covered employees. The
share of the employees shall be equally distributed among them. In case the
service charge is abolished, the share of the covered employees shall be
considered integrated in their wages. The failure of any employer to remit said
service charges to its employees in accordance with this article shall be
punishable by a fine of 100,000.00 for every instance.

SECTION 2. Repealing Clause. - All other laws, decrees. ordinances, rules, regulations
and other issuances or parts thereof, which are inconsistent with this Act are hereby repealed or
modifies accordingly.

SECTION 3. Effectivity. - This Act shall take effect fifteen (15) days after the
completion of its publication in the Official Gazette or in two (2) newspapers of general

circulation.

Approved,