In a relief to lakhs of employees working in various medium and small scale industries, the Karnataka High Court on Friday stayed the execution and operation of the July notification of the State government allowing industries to defer payment of Variable Dearness Allowance (VDA) for the period between April 1, 2020 to March 31, 2021.
A Division Bench comprising Chief Justice Abhay Shreeniwas Oka and Justice Ashok S Kinagi passed the interim order while terming as “ex-facie illegal” the July 20 notification issued by the Government for deferring payment of VDA the 82 scheduled employments identified under the Minimum Wages Act, 1948 in Micro, Small and Medium Enterprises sector.
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The labour unions — The Karnataka Industrial and Other Establishments Employees’ Federation, the All India Central Council of Trade Unions, the All India Trade Union Congress and the Centre of India Trade — had questioned the legality of the July 20 notification.
The government, based on the representations by the MSMEs seeking deferment of VDA payment citing COVID-19 financial crisis, had issued the July 20 notification after holding meetings with the industry representatives and the unions.
