Kathmandu, February 11

Agitating hotel and restaurant workers have warned of taking to the streets from February 16 if the umbrella bodies of hotels and restaurants remain indecisive in sorting out the issue of service charge.

Trade unions related to hotels and restaurants have been demanding that they should get the entire amount of service charge being collected from  customers. Currently, the service charge amount is being shared among the workers and the management in the ratio of 68:32.

The 10 per cent service charge on top of the advertised bill had been introduced in January 2007 following a bilateral agreement between Hotel Association Nepal (HAN) — the umbrella body of tourist standard hotels in the country — and the trade unions of hotel and restaurant workers, with the provision that the agreement would be reviewed every three years.

“However, the agreement has not been reviewed since it was introduced over 10 years ago and the management is not properly utilising the amount that we share with them, as envisioned, for enhancement of services,” said Surya Bahadur Kunwar, president of Nepal Independent Hotel, Casino & Restaurant Workers’ Union (Central Committee). “Hence, we are now seeking entire ownership in service charge. Currently, the service charge being collected from the customers is equally distributed — from the chairman to the doorman.”

Trade unions affiliated with three major political parties, namely, Nepal Tourism and Hotel Labourers Association; Nepal Independent Hotel, Casino & Restaurant Workers’ Union; and All Nepal Hotel, Casino and Restaurant Workers’ Union have been taking the lead in the protests.

The agitating forces had submitted a joint memorandum to the HAN, Restaurant and Bar Association of Nepal (REBAN) and Fastfood Association Nepal a month back demanding the entire service charge amount.

Subsequently, HAN had invited the trade union leaders around three weeks ago to sit for talks to resolve the issue. However, the talks ended inconclusive as the trade union leaders refused to budge from their stance on claiming cent per cent stake on the service charge.

A hotelier, requesting anonymity, opined that the management has every right to a certain amount of the service charge because ‘such charge is levied for the services provided by the hotels and restaurants, and the management also need to invest for the goods, equipment and its upkeep’.

Since the trade union leaders refused to show any flexibility during the talks, some hoteliers and restaurant owners have even started to say that if the management is not going to get any share in the service charge, it should be removed altogether.

A joint team of HAN and REBAN are going to sit for talks again with the trade unions on February 14 to try to find an amicable solution to the issue.

Consumer rights activists, on the other hand, say that the matter on which the trade unions have locked horns with hoteliers and restaurant owners has no legal base.

“We had filed a petition at the Supreme Court immediately after the associations of hotels and restaurants and trade unions formally introduced the service charge on top of the advertised bills and the court had issued verdict to the government to frame law to regulate the service charge issue,” said Jyoti Baniya, a consumer rights activist, who chairs the Forum for Protection of Consumer Rights. “The service charge is being imposed against the court’s verdict since long.”

A consumer has to pay extra 24.3 per cent — 10 per cent service charge, 13 per cent value added tax and 1.3 per cent VAT amount of the

service charge — on top of the advertised bill for obtaining service from hotels and restaurants.

“Thus, if the service charge is removed, the bill for enjoying the facilities provided by hotels and resturants will go down by 11.3 per cent,” as per consumer rights activists.