The bodies argue that levying service charges is not illegal and this does not amount to unfair customer service, as per the reports
After the Delhi High Court ruled that customers cannot be forced to pay service charges or tips, the restaurant and hotel associations have now contested the order, arguing that the charge is legal and ensures fair tip distribution, according to media reports.
In its petition in the Delhi HC, the National Restaurants Association of India (NRAI) highlighted that levying service charges is not illegal and this does not amount to unfair customer service. Representing over five lakh restaurants, the NRAI argued that this transparent system is being followed all over the world, the media reports added.
The reports pointed out that the hotel associations have challenged the order on the argument that service charges ensure fair distribution of the tip amount. Earlier, in its ruling, the Delhi HC ordered that customers cannot be forced when it comes to service charges or tips, as it violates consumer rights.
The Delhi HC had ruled that service charges need to be made a voluntary option. While this may prove to be beneficial for the customers, the reports added that the restaurant bodies are concerned about the negative financial impact on staff due to such a ruling.
The reports added that many restaurants are exploring options like hiking menu prices by around five to eight per cent to make sure that staff do not have to bear the burden, as the bodies noted that employees in the serving, cleaning and kitchen jobs used to receive combined service charge earnings monthly. Restaurants have seen a steep impact of the order by the Delhi HC, the reports added.
