Nepal | July 10, 2020

Restaurant workers oppose decision to drop service charge

Himalayan News Service
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Kathmandu, January 30

Workers affiliated to three trade unions of hotels and restaurants have jointly protested the decision made by restaurateurs of Kathmandu, Pokhara and Sauraha to remove 10 per cent service charge that was being levied on the bill of customers.

Releasing a press statement today, All Nepal Hotel Casino & Restaurant Workers Union, Casino & Restaurant Workers Union, and National Tourism and Hotel Associated Workers’ Union have said that they are against the decision to withdraw the service charge.

Madhav Pandey, president of Casino & Restaurant Workers Union, said that the 10 per cent service charge that was being levied was as per the Labour Act. “The service charge was a legal and also a social right of the worker, so it is not necessary that we need to follow the decision taken by Restaurant and Bar Association Nepal (REBAN) on Monday to drop the service charge.”

On Monday, REBAN had made the decision to drop the service charge citing that customers were dissatisfied and had been regularly making complaints against it. It had also mentioned that removing the 10 per cent service charge could encourage more people to visit restaurants.

Meanwhile, the unions have objected to REBAN’s decision and issued a 24-hour ultimatum demanding its withdrawal.

Similarly, Khem Raj Khadka, president of National Tourism and Hotel Associated Workers’ Union, has argued that the workers were benefiting from the service charge. He added that the workers could start stringent protests if REBAN does not listen to their demand.

The trade unions have suggested that instead of dropping the service charge to lure customers the restaurant owners could choose to reduce the price of food items they serve to address customer’s complaints.

Currently, all hotels and restaurants are collecting 10 per cent service charge from clients. The service charge that was being collected was being distributed among the restaurant owners, workers, trade unions and also the Hotel Association Nepal. The new sharing structure of the 10 per cent service charge had not only increased workers’ share but had also made the three trade unions its shareholders.

As per the new service charge sharing structure, workers had been getting 72 per cent of the 10 per cent service charge and the three trade unions had been getting one per cent each. Of the remaining 25 per cent, hoteliers had been getting 23 per cent of the service charge while Hotel Association Nepal had been getting two per cent.


A version of this article appears in print on January 31, 2019 of The Himalayan Times.


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