Trade unions of hotels and restaurant workers have threatened to close the restayrents nationawide demanding rollback of a decision to withdraw 10 per cent service charge levied on restaurant bill.
Restaurant and Bar Association Nepal (REBAN) – a professional body of restaurants and bars across the country – had last week decided to withdraw 10 per cent service charge in Kathmandu, Sauraha and Pokhara, citing complaints from consumers. It also said that other restaurants and bars in other cities will withdraw the service charge gradually.
All Nepal Hotel Casino and Restaurant Workers Association, Casino and Restaurant Workers Union, and National Tourism and Hotel Associated Workers’ Union organised a rally today demanding REBAN to withdraw its decision of scrapping service chargeand also threatened to close all restaurants and bars from Tuesday, if the decision is not rolled back immediately.
A day after REBAN took a decision to scrap service charge, the trade unions had given a 24-hour ultimatum for rollback of the decision.
The mandatory service charge system came into force on January 1, 2007. Since then, hotel and restaurant customers have been paying 24.3 per cent extra on the restaurant bill as 10 per cent compulsory service charge, 13 per cent value added tax (VAT) and 1.3 per cent service tax. The VAT and service tax go to the government.
REBAN, Hotel Association Nepal (HAN) and trade unions of hotels and restaurant workers had revised the agreement on May 26, 2018 to provide larger share from funds collected from 10 per cent service charge to workers. The agreement had come into effect on June 8, 2018. Under the revision, hotel employees would get 72 per cent, the hotel management would get 23 per cent and HAN would get 2 percent. The trade unions claim that instead of giving workers their due share, REBAN chose to scrap the service charge.
"REBAN has acted against the spirit of the agreement," president of All Nepal Hotel, Casino and Restaurant Workers Association Madhav Pandey said, adding that they are forced to go streets.
However general secretary of REBAN Araniko Rajbhandari said that there was no point conducting protest as the Supreme Court has also issued a show cause notice against the decision. REBAN – also issuing a press note today – said that it is serious about the well being of its workers. “We have already taken needful initiative to implement basic salary announced by the government," the note reads, adding that tips collected from the clients will be distributed among workers.
But the three trade unions affiliated to the ruling and opposition parties have decided to shut down all member restaurants of the Restaurant and Bar Association of Nepal for an indefinite period from Tuesday onwards.
"The service charge is workers’ rights and has to be implemented at any cost," according to president of Casino and Restaurant Workers Union Surya Bahadur Kunwar, and president of National Tourism and Hotel Associated Workers’ Union Khemraj Khadka.
But the consumer rights activists have welcomed the REBAN’s decision. The rights group said that the Consumer Act and the Constitution stipulate that consumers not be cheated on the pretext of collecting a service charge.
Restaurant and Bar Association Nepal (REBAN) – a professional body of restaurants and bars across the country – had last week decided to withdraw 10 per cent service charge in Kathmandu, Sauraha and Pokhara, citing complaints from consumers. It also said that other restaurants and bars in other cities will withdraw the service charge gradually.
All Nepal Hotel Casino and Restaurant Workers Association, Casino and Restaurant Workers Union, and National Tourism and Hotel Associated Workers’ Union organised a rally today demanding REBAN to withdraw its decision of scrapping service chargeand also threatened to close all restaurants and bars from Tuesday, if the decision is not rolled back immediately.
A day after REBAN took a decision to scrap service charge, the trade unions had given a 24-hour ultimatum for rollback of the decision.
The mandatory service charge system came into force on January 1, 2007. Since then, hotel and restaurant customers have been paying 24.3 per cent extra on the restaurant bill as 10 per cent compulsory service charge, 13 per cent value added tax (VAT) and 1.3 per cent service tax. The VAT and service tax go to the government.
REBAN, Hotel Association Nepal (HAN) and trade unions of hotels and restaurant workers had revised the agreement on May 26, 2018 to provide larger share from funds collected from 10 per cent service charge to workers. The agreement had come into effect on June 8, 2018. Under the revision, hotel employees would get 72 per cent, the hotel management would get 23 per cent and HAN would get 2 percent. The trade unions claim that instead of giving workers their due share, REBAN chose to scrap the service charge.
"REBAN has acted against the spirit of the agreement," president of All Nepal Hotel, Casino and Restaurant Workers Association Madhav Pandey said, adding that they are forced to go streets.
However general secretary of REBAN Araniko Rajbhandari said that there was no point conducting protest as the Supreme Court has also issued a show cause notice against the decision. REBAN – also issuing a press note today – said that it is serious about the well being of its workers. “We have already taken needful initiative to implement basic salary announced by the government," the note reads, adding that tips collected from the clients will be distributed among workers.
But the three trade unions affiliated to the ruling and opposition parties have decided to shut down all member restaurants of the Restaurant and Bar Association of Nepal for an indefinite period from Tuesday onwards.
"The service charge is workers’ rights and has to be implemented at any cost," according to president of Casino and Restaurant Workers Union Surya Bahadur Kunwar, and president of National Tourism and Hotel Associated Workers’ Union Khemraj Khadka.
But the consumer rights activists have welcomed the REBAN’s decision. The rights group said that the Consumer Act and the Constitution stipulate that consumers not be cheated on the pretext of collecting a service charge.
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