A spat between hotels and the Workers' Union is not about how to distribute revenues, but about short changing some in the industry, writes Sherine Nasr The past few weeks have witnessed a heated battle between the Egyptian Hotel Association (EHA) and the Egyptian Trade Union for Hotels and Tourism Workers (ETUHTW). The dispute over the 12 per cent service fees charged by hotels and restaurants on every bill paid by customers is not necessarily about how to distribute the cash, but not substituting tips for wages. While the EHA's concern is that service fee revenues should revert to a former system of distribution, the ETUHTW has a bigger issue with the fact that business owners are using the cash as a substitute for paying salaries. Some 80 per cent of total service fees in the majority of Egyptian hotels is distributed equally among labour in direct contact with customers, such as waiters and room service, and indirect labour including those in sales, maintenance and accounting. The remaining 20 per cent goes to the owners to compensate for damaged and lost items. "Both workers and owners are happy with this system," asserted an informed source at EHA, who preferred to remain anonymous. However, the workers' union is concerned that the majority of hotels consider these service fees as a substitute for paying salaries to the staff in direct contact with customers. "The sum allocated to workers from the service charge cannot by any means be considered a substitute for a permanent salary," argued ETUHTW Chairman Mohamed Hilal El-Sharqawi. "This is one of our major concerns and perhaps the main point of the conflict between the union and the association." El-Sharqawi added that hotels were exploiting unemployment among youth to cut corners in operational costs. According to a senior accountant at a five-star hotel, the 12 per cent service charge in a peak season can yield some LE500,000 a month. After reviewing the files of 15 five-star hotels for 2005/ 2006, ETUHTW found that the staff receive only a fraction of this estimated revenue. "The total sums that were allocated to labour amounted to LE28 million," said El-Sharqawi. Although labour laws allow the workers' union to inspect hotel personnel files, they don't have the power to change the status quo. "We simply uncover violations, but we have no legal means to penalise perpetrators," said El-Sharqawi. A report by ETUHTW on the conditions of employment in five-star hotels around the world reveals that this system only exists in Egypt. "As a workers' union, it is our duty and responsibility to preserve the rights of workers," asserted El-Sharqawi. The workers' union will hold an extraordinary General Assembly on Monday to discuss ways to preserve the rights of hotel workers with regards to monthly payment, and a share of the service charge. Service charge revenues are distributed among workers in hotels and tourist establishments according to a ratio regulated by several ministerial decrees. The latest, Decree 125 of 2003, states that 60 per cent of service charge revenues should go to workers in direct contact with customers, 15 per cent to non-direct contact staff, 20 per cent to the owner. The remaining five per cent is to be distributed at the management's discretion as bonuses for distinguished performance. Decree 125 was enacted only after all concerned bodies approved it, but to escalate the ongoing row, EHA filed a suit against the ministries of tourism and labour, as well as the ETUHTW to annul the decree. EHA wants the system to revert to pre-Decree 125 distribution percentages. "The decree separates labour into 'direct and indirect' categories which is unconstitutional," said the EHA source, adding that such differentiation has created sensitivities among workers in the same establishment. But for the union, it isn't an issue of percentages, especially that the owner's share of 20 per cent is already exaggerated. "The international standard is estimated at six per cent only; but this is not a point of major concern to us as a union," asserted El-Sharqawi. "We believe that tips do not substitute for a salary." Three months ago, there were talks between EHA and ETUHTW to reinstate the traditional way of distributing the service charge, but "unfortunately, the association would not approve the agreement because we made it clear that hotels should pay salaries to staff which are in direct contact with customers," he said. The ETUHTW is strongly backed by Minister of Labour Aisha Abdel-Hadi, who made it clear that many of the hotels in Egypt are violating the rules for distributing the 12 per cent service charge. Moreover, Abdel-Hadi noted that "a payment" is a basic component in an employee-employer relationship. "To abstain from paying salaries is considered a violation of work conditions as stipulated by the law," she told Al-Ahram newspaper two weeks ago.
