Money

Only a few restaurants take service charge off the menu

- KRISHANA PRASAIN, Kathmandu

Feb 18, 2019-

Prithvi Awasthi, who works at a private bank in Kathmandu, went for lunch at a cafe in Jhamsikhel with his friends last Friday. When he was given the bill, he saw 10 percent mandatory service charge added on it.

He then asked the cafe management why it was charging the service charge as it has already been scrapped by the Restaurant and Bar Association of Nepal (REBAN).

The owner of the cafe informed Awasthi that their workers are against the REBAN’s decision. Like Awasthi, many customers have been complaining that they are forced to pay the service charge despite the announcement that it has been scrapped.

It has been more than two weeks since REBAN’s decision to scrap the service charge from meal bills. However, only a few restaurants in the Kathmandu Valley have removed the mandatory service charge and made it discretionary.

“Customers have started creating pressure on us to fully implement the decision,” said Araniko Rajbhandari, general secretary at REBAN. “We are receiving many calls from customers,” he said.

Restaurants such as Aagan, Gulab Sweets Nepal, KKFC, Taas and Tawa have already removed service charge from their menus, he said.

All restaurants in Sauraha, Chitwan have also removed service charge from their menus. In Pokhara, only a few restaurants associated with REBAN have been charging the 10 percent service charge, he said.

Many big restaurants such as Bakery Cafe, Roadhouse Cafe, Fire and Ice and KFC among others, which are under the trade unions control, have been levying the service charges, said Rajbhandari.

Pratap Bista, in-charge at Gulab Sweets Nepal, said that after removing service charge from the menu, the management have agreed to pay Rs13,450, including Rs1,500 as an extra allowance, to all workers. The pay scale is at par with the government’s minimum pay for the industrial and service sector.

Before that, according to Bista, the management used to pay Rs9,700 as basic pay and an additional Rs1,500 as allowance that used to be collected from service charge.

Workers at Taas and Tawa said that their management has not spoken to them regarding the increment in their pay after scrapping the service charge. Shiva Piya, owner at Taas and Tawa, has not made a commitment to raise the pay of workers. “This is our internal matter and we will resolve it through talks,” he told the Post.

REBAN said that their member restaurants were fully committed to providing the government announced minimum pay and social security fund without making service charge a mandatory provision.

According to Rajbhandari, restaurants are liable to pay Rs15,700 to each worker that includes basic salary of Rs13,800 and the remainder as social security and provident funds and insurance premium.

As many restaurants are still not providing minimum pay to the workers, Rajbhandari claimed that basic pay is mandatory. “There is no need to open restaurants, if he/she cannot afford to pay the basic salary.”

REBAN’s decision to scrap service charge was welcomed by the Federation of Nepalese Chambers of Commerce and Industry, the Confederation of Nepalese Industries, including 25 other business organisations.

The Federation of Nepalese Chambers of Commerce and Industry said that 10 percent service charge also needs to be scrapped from the hotel sector as well.

Shekhar Golchha, vice president at the federation, said that the service charge burden should not be passed onto the customers.  

Dissatisfied with the REBAN’s decision, three trade unions affiliated to the ruling and the opposition parties had initially announced to halt the services of restaurants as part of their protest. However, they postponed their protest awaiting the Supreme Court’s verdict on the issue. Consumer rights group have filed a writ at the court saying that service charge cannot be made mandatory.

Published: 18-02-2019 10:03

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