Who is entitled to sharing proceedings from service
charges at Ethiopia’s most luxurious hotel remains a
bone of contention between its management and labour
union leaders, which has led to temporary
interruption of negotiations, last week.
Senior managers of the Sheraton Addis and leaders of
its newly formed labour union have been locked into
an otherwise bitter dispute since December 2010.
Although both parties have thrashed out some of the
46 provisions in the collective agreement they are
negotiating on, disagreements over the entitlement
of service charges remained unresolved when they met
on Tuesday, February 1, 2011 Solomon Getaneh
secretary of the labour union said.
Both parties were mediated by Kidus Teshome and
Biniam Taddese of the Addis Abeba Labour and Social
Affairs Bureau, since January 7.
Salaries, bonuses, and service charge payments
differ sharply. While the management, under Jean
Pierre Manigoff, has proposed salary adjustments,
the labour leaders have their own ideas about how
big an increase the more than 840-member labour
Both sides are hoping to continue discussions on the
issue next week, according to those close to the
What seems a thorny issue that is dear to both sides
is the sharing of 10pc service charges collected
from customers of the hotel. It exceeds an average
of four million Birr per month. A labour force that
feels underpaid does not consider service charge
payments, which are equally distributed among all
employees, a part of its basic salary.
The amount employees take home at the end of the
month is of the highest in the country, argued the
management, which hands out an average monthly
amount of 5,337 Br to each employee, including
Some members of the management should not be
included in sharing of proceeds from service
charges, argued said the labour union leaders.
“The service charges have been equally shared among
all Ethiopian staff ever since the hotel’s
establishment,” Manigoff said, in a text message
sent to Fortune.
The general manager, who is being confronted with an
unruly labour force for the first time in the 12
years he has been managing the hotel, declined to
comment further, as negotiations are ongoing.
The hotel has close to 19 expatriate management
members who are not included on the list of those
who share the service charges.
However, there are 12 Ethiopian senior management
staff members who each take service charge payments
that reduce 52 Br from an average employee, argued
members of the management team who requested
Labour leaders stood their ground, fighting for
these managers to stop sharing in the service
“The labour union has agreed to concede on the
issues of annual salary increments and bonuses,
hoping to achieve a concession on service charges,”
Solomon told reporters at a press conference given
by labour leaders, on Thursday, February 3, at the
office of the Federation of Ethiopian Trade Unions (FETU).
The two sides, which do not include the general
manager for the negotiations conducted in Amharic,
have locked into a disagreement over the definition
of “concerned employees” deserving to share service
charges as stipulated in the collective agreement,
sources close to the negotiations told Fortune.
There is a sharp difference of views between the
negotiators. Labour leaders argued that “concerned
employees” mean those covered under the collective
agreement, while the management argued that a
failure to include them in the sharing of service
charges would amount to violations of the terms of
their contractual agreements.
Each employee, with the exception of expatriate
staff, is hired with contractual rights of
entitlement to service charges and benefits such as
healthcare, according to senior managers of the
The negotiations with the management have never been
easy, claimed Gessese Abegaz, president of the
Federation of Hotels and Tourism Employees Trade
“They have begun denying the labour union its
benefits after it was established,” he said at the
press conference. “The management knows that service
charges are the largest part of the employees’
The turn of events saddened the federation,
according to Gessese, who plans to talk to the
Confederation of Ethiopian Trade Unions (CETU) so
that the management will continue negotiations on
the collective agreement.
Kassahun Follo, president of the confederation,
visited Manigoff late last week in an effort to
persuade both parties to resume the talks, out of
which labour leaders walked, last week.
This had angered Mohammed Ali Al-Amoudi, the owner
of the hotel, who felt unappreciated and
unrecognised for his generosity to employees of the
hotel, senior managers at the hotel told Fortune.
The owner is now contemplating to shut down the
hotel for two years in order to start its planned
expansion in the direction of the Ministry of
Foreign Affairs (MoFA), an idea senior managers at
the hotel claimed was put on hold until a decision
was made about the alternative of launching
construction adjacent to the existing hotel while it
remained open for service.
This news created panic among employees last week,
for some understood it to be in retaliation of their
defiance of the management.
“Management cannot decide to shut down the
property,” said a senior manager at the Sheraton,
who requested anonymity due to the sensitive nature
of the dispute. “Only the owner has that right. This
has been an issue for as long as the plan to
undertake the second phase of expansion on the