Labour Court Declares Closure of Hyatt Regency Illegal

Hyatt Regency, the hotel in Mumbai, had to halt its operations due to its parent company Asian Hotels (West) Ltd. wasn’t making the payments. The halt in operations has now been deemed ‘illegal’ by a labour court under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices (MRTU and PULP) Act, 1971. SV Suryawanshi, a member of the industrial court in Mumbai passed an order which stated that it is held and declared that respondents (Hotel Hyatt Regency) have engaged in unfair labor practice under Item 6 of Schedule II and Item 9and 10 of Schedule IV of MRTU and PULP Act 1971. Respondents are directed to cease and desist from the same.

The Reason Behind the Shutdown

Earlier on June 7th, the management of the Hyatt Regency decided to shut down the operations of the prestigious 5-star hotel after its parent company Asian Hotels (West) Ltd. stopped making payments for the operations and salaries. Consequent to these actions, around 200 employees reached out to the industrial and labour court to protect themselves from termination. Furthermore, these affected employees are part of a worker’s union affiliated with Shiv Sena called Bhartiya Kamgar Sena. Union Secretary Manoj Dhumal also confirmed in a statement that the labour court has ruled in favour of the employees and the company need to pay them their salaries. The labour court also instructed the Asian Hotels (West) to provide work and/or wages to its employees so far as they are in employment including arrears of earned wages. Hyatt on the other hand is an American hospitality company that manages franchises of luxury hotel brands and manages Hyatt Regency on behalf of the Asian Hotels (West). When the hotel shut down in June, Asian Hotel told in a statement that the management had to halt all the operations as, Yes Bank with which it maintains an account decided to seal its accounts because of default in loan payments. Asian hotels sighted crisis of liquidity because of the covid-19 pandemic as the reason behind payment default. Also, it was reported this week by The Indian Express that Yes Bank has taken over the property of Hotel Hyatt Regency after Asian Hotels (West) had defaulted on a loan payment of Rs 267 Crores.