BENGALURU: The Karnataka High Court directed the state government not to take coercive measures until the next date of hearing against the petitioners --Bruhat Bengaluru Hotels Association -- for default in paying Gratuity Insurance Premium to employees who have completed five years of service.
Justice BM Shyam Prasad passed the interim order after hearing the petition filed by the Association in 2024, questioning the notification dated January 10, 2024 issued by the Department of Labour. The hearing was adjourned to June 3.
The petitioners’ counselargued that the court will have to interfere and strike down insurance rules as they compel employers to pay gratuity insurance premium even for those employees who have not completed five years.
Insurance Rules do not distinguish between the employers based on any parameters. This has to be considered as the insurance premium will have to be paid even before the gratuity becomes payable and small-scale industries are financially burdened beyond their profits.