Following complaints from many hospitality sector workers that they did not get paid for the month of Chaitra, representatives of hotels on Monday agreed to pay their staff in a talks between the two sides interceded by the Ministry of Labour and Social Security.

During the meeting between the representatives of the Hotel Association of Nepal and trade union, the former expressed a commitment to pay the workers for the month of Chaitra (Mid-March-Mid-April). The two sides, however, are yet to decide the terms of payment for the months ahead.

“They have agreed to continue the negotiations regarding the wages for the coming months,” said Suman Ghimire, spokesperson at the Ministry of Labour and Social Security.

The tourism sector—covering the broader hospitality industry including hotels, restaurants, airlines and trekking and tour businesses, has been hit hard due to domestic and global travel restrictions triggered by the Covid-19 pandemic.

An emergency meeting of the Hotel Association of Nepal on Sunday decided to pay only 12.5 percent of the basic salary to the employees while deciding to close the hotels for six months.

The basic salary for each employee set by the government is a little over Rs13,000. In addition, employees will also get the service charges that are accumulated and often distributed after six months, according to the association.

The tourism sector employs over one million people in the country, according to the World Travel and Tourism Council’s report published last year.

Meanwhile, the other sectors are also proposing wage cuts as industries and businesses have been shut down due to the lockdown that has been going on since March 24, putting the livelihood of hundreds and thousands of people at stake.

Issuing a joint statement on Sunday, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Confederation of Nepalese Industries (CNI), two representative bodies of the business community, said that the employers were not in the position to pay their workers more than 50 percent of their wages due to the closure of industries and businesses.

The business community came up with their own plan after the government on April 30 said that employers need to pay their workers 50 percent of their wages for the month Baishakh (Mid-April-Mid-May) and the remaining sum after the businesses have resumed.

The government has also promised refinancing facilities at lower interest rates through the central bank to support the struggling businesses.

As per the Labour Act 2017, enterprises can put workers in reserve in the situation which is out of control and in the situation where there are economic crises, lack of electricity and raw materials. During such a period, workers who are in reserve, should be paid 50 percent of their usual wages.

“The decision of the Hotel Association of Nepal on wage cuts is against the labour law,” Pushkar Acharya, president of Nepal Trade Union Congress and the head of Joint Trade Union Coordination Centre, told the Post. “It is also against the government’s decision. But the government has been shaking its legs to enforce its own decision.”

He also questioned the different decisions of the Hotel Association and the joint decision of FNCCI and CNI regarding wage cuts, one offering 12.5 percent and another offering 50 percent of wages.

Binayak Shah, senior vice-president of Hotel Association of Nepal, told the Post that it was hard for hotel operators to keep paying the employees since nobody knew how long the pandemic was going to last.
He, instead, demanded that the workers be paid from the social security fund.

But the government has insisted that the hoteliers must pay their workers.

Ghimire, spokesperson at the Labour Ministry, said that during Monday’s meeting between the Hotel Association of Nepal and the trade union representatives, the ministry officials had reminded the hotel operators that they need to pay their staff on the humanitarian grounds as well since the government was also offering them several incentives to rescue their businesses out of the current crisis.

“The ministry has made itself clear on this issue. The government just cannot agree with the wage cut decision of the Hotel Association of Nepal,” Ghimire told the Post.