Trade unions of hotels and restaurants threaten to close eateries from February 19 to protest SC’s verdict

Published On: February 5, 2023 08:20 PM NPT By: Republica | @RepublicaNepal

KATHMANDU, Feb 5: Workers of hotel and restaurants have warned to close all the eateries throughout the country from February 19 in protest of the Supreme Court (SC)’s verdict to scrap 10 percent service charge.

Three unions affiliated to the hotels and restaurants have decided to launch the protest. These include Nepal Tourism and Hotel Related Workers Union, Nepal Independent Hotel and Casino and Restaurant Workers Union, and the All Nepal Hotel, Casino and Restaurant Workers’ Union.

Kumar Pant, president of the All Nepal Hotel, Casino and Restaurant Workers’ Union, said they will stop taking bookings at the hotels from Friday. “If the service charge is not considered valid, then the government or hotel management needs to provide the equivalent amount to the workers through some mechanism,” Pant said.

Following the SC’s decision, workers concerned have launched protests by tying black armbands around their hands while on duty. Similarly, the workers have been halting their work for an hour during their duty hours every day.

On January 25, the SC issued a mandamus order prohibiting the eatery businesses from taking any payment beyond the menu prices. Prior to the apex court verdict, hotels and restaurants had been taking an additional 10 percent charge from the customers under the heading of service charge. On top of it, they also imposed 13 percent VAT on the cumulative amount.

The mandatory service charge system came online on January 1, 2007. Since then, hotel and restaurant customers have been paying 24.3 percent more than the menu price — 10 percent compulsory service charge and 13 percent VAT. Of the amount collected in service charge, employees used to get 68 percent and management received 32 percent of the amount collected as service charge.

Later in June 2018, Hotel Association Nepal (HAN) and the Nepal Tourism and Hotel Laborers Association agreed that hotel employees would get 72 percent, the hotel management would get 23 percent, HAN would get 2 percent and the three trade unions affiliated to the Nepali Congress, CPN-UML and CPN (Maoist Centre) would get 1 percent each.