Hotel Workers Claim Victory: Agreement on Service Charge Implementation
representing hotel, catering and tourism workers in Nepal secured
in January 2007 through a bipartite agreement for a phased introduction
of a 10 percent service charge in 2007 and 2008. This follows upon
more than five years of intense opposition by Nepal’s hotel
owners, prominent among them members of the royal family.
The service charge
will operate in hotels and restaurants and will benefit an estimated 200,000
workers and their families in the industry. The agreement was reached
between the hotel owners group (Hotel Association of Nepal, HAN) and a
joint grouping of five unions representing hotel workers (including the
IUF affiliates Nepal Tourism & Hotel Workers Union, NTHWU, and the
Nepal Independent Hotel Workers Union, NIHWU). The service charge will
be divided between a 68% share going to workers and a 32% share being
retained by the owners. For 2007 the service charge will apply to all
services in hotels and restaurants except accommodation, from January
2008 accommodation will be included.
Points of Service Charge Agreement:
• 200,000 workers and families benefit;
• From Jan 1, 2007 10% on all services in hotels and restaurants,
• From Jan 1, 2008 accommodation will be included in service
• Of service charge collected, 68% share will go to workers,
32% retained by owners.
IUF affiliates the
NTHWU and the NIHWU first started the struggle for a service charge through
a joint campaign in 2000 following participation in IUF meetings and discussions
with other hotel unions, for example from Malaysia and the Philippines
where the service charge operates as part of normal hotel business.
The campaign for a
service charge in Nepal enjoyed massive support from rank and file trade
union members, especially because a properly implemented service charge
has such positive effects in terms of income for workers and their families.
Moreover, the service charge plays a very important role in distributing
more fairly the revenues earned in the tourism industries.
Hotel owners from the
outset resisted the service charge and through pressure on the government
in 2001, forced through changes in the law via the Essential Services
Act to prohibit strikes in the hotel sector. Hotel unions were thus denied
their fundamental rights and their collective capacities to agitate legally
for change were neutered. (In 2002, following a complaint lodged by the
IUF, the ILO declared the government’s action in extending the Essential
Services Act to prohibit strikes in the hotel sector contrary to fundamental
The royal coup of 2005
put workers and unions under greater pressure, but this did not destroy
them. In fact, the April 2006 rebellion which overthrew the royal dictatorship
was only possible because of the active participation of Nepal’s
workers and trade unions. A new political landscape was opened for real
change which would benefit all.
In this context securing
the agreement for the service charge with HAN is a concrete result of
the will and efforts of hotel workers finally being able to win their
demands. This is a sign of an important change: employers in Nepal can
no longer hide behind the cover of dictatorship and arbitrary power in
order to deny workers their rights.
In the coming months
hotel unions in Nepal will be working towards making sure the service
charge is implemented properly. The task of removing the hotel sector
from the Essential Services Act remains. Nepal’s hotel unions have
won an important achievement, hotel unions in the region will look to
Nepal to see how unions can build on these gains.
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