HEAVY FINE FOR RESTAURANT TAKING SERVICES CHARGES IN UAE

Restaurants across the United Arab Emirates (UAE) have withdrawn service charges, abiding by the directive issued by the Ministry of Economy in December that the practice of imposing a service charge on food bills is illegal.

• Residents will pay less when they eat out as service charges are off the menu effective from Wednesday.
• Restaurants across the UAE have withdrawn service charges, abiding by the directive issued by the Ministry of Economy in December that the practice of imposing a service charge on food bills is illegal. Authorities had given outlets a month's grace period to comply, which ends on Wednesday.
• Following complaints that some restaurants were charging up to 20 per cent of the bill as a service charge, the Ministry ruled that it is against the consumer protection law number 26 for year 2006. But despite media reports, a majority of outlets continued to flout the rule insisting that they did not receive communication from the authorities.
• From the first week of January, the ministry started sending instructions to outlets and set February 10 as the deadline to stop the illegal practice, warning them that heavy fines will be imposed if they violate the rule.
• With the deadline ending today, Gulf News has found that most of the outlets have started complying, and have taken off the service charge from the billing system and menu.
• Paul, a popular restaurant said they have withdrawn their 10 per cent service charge from January 5 onwards after they received a memo from the authorities.
• John Valdez, restaurant manager at the fast food outlet Chili's said they have also stopped taking a 10 per cent service fee. "We were waiting for specific instructions and we have already implemented the new rule by taking it off from the system," Valdez said.
• Japengo Café, another franchise has also followed suit.
• Restaurants in Sharjah have also abided by the rule and stopped imposing service charge on their customers, and both managers and employees said they are well aware of the consequences if they fail to do so.

Source: GulfNews