A day after 5 Star luxury hotel Hyatt Regency Mumbai suspended operations due to paucity of funds, employees of the hotel who are part of the Bharatiya Kamgar Sangh moved the Industrial Court in Mumbai seeking protection from termination. The court has granted ad-interim relief to Bharatiya Kamgar Sangh, protecting them from termination until the next date of hearing on June 28.
In a statement on June 7, Hyatt Regency Mumbai said that future reservations through Hyatt booking channels will be temporarily unavailable and that the hotel will remain shut until further notice.
The hotel has over 300 employees, of which 193 are part of the union. Employees told CNBC-TV18 that they haven't been paid salaries for April and May and that they didn’t have any prior intimation about a possible suspension of services.
Employees have also alleged that operations have been suspended despite the hotel having an average occupancy of 60 to 90 percent over the past few weeks, including at the time of suspending operations.
Employees of Hyatt Regency Mumbai. (Image: Shilpa Ranipeta/CNBC-TV18)
"It came as a surprise to us yesterday when we were told that the hotel is suspending operations, and that they can’t pay salary for two months. We have already been following up from last month about our pay and they kept delaying it. They said that Yes Bank has frozen the account so they’re unable to make transactions. And now it’s come to a situation that we have had to move court with help of Bharatiya Kamgar Sena," said Meenal, a chef at Hyatt Regency Mumbai and member of the union.
Meanwhile, Asian Hotels West, the owner of Hyatt Regency Mumbai, said in a filing with stock exchanges on Tuesday that Yes Bank held all funds including daily hotel collections, in an escrow account. This was because Asian Hotels West defaulted on April 28 on payment of interest and principal amount of a Rs 4.32 crore loan it took from Yes Bank. The hotel added that this was the first default and was primarily due to the massive effect of the COVID-19 pandemic on the company and the industry across the globe.
Since then, the company and the hotel have not been allowed to make any payments including government taxes (like GST, VAT, TDS, PF, ESIC, etc), vendor payments and salaries of roll employees and other critical hotel services from the said account.
"Yes Bank has made some payments from the company's escrow account, towards Hotel's electricity, water and gas charges," the company said.
Asian Hotels West registered a loss of Rs 11 crore in Q3FY21 amid travel curbs due to the COVID19 pandemic.
Now, employees have appealed to the Industrial Court, Mumbai, for payment of pending dues and that the hotel cannot shut down without following due process. The court has sought a response from Asian Hotels West.
(Edited by : Jerome Anthony)
First Published: IST