Payment of Bonus F

Payment of
Bonus
DATE \@ "MMMM d" \* MERGEFORMAT July

31
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Applicability
From the side of the Establishment
It applies to every factory and every other establishment in which 20 or more persons
are employed on any day during an accounting year.
From the side of the Employee
Section 8: Eligibility for bonus: Every employee shall be entitled to be paid by his
employer in an accounting year, bonus, in accordance with the provisions of this Act,
provided he has worked in the establishment for not less than thirty working days in
that year.
Any person (other than an apprentice) employed on a salary or wage not exceeding Rs.
21,000 per month in any industry.
Not Applicable to
• (a) Employees employed by the Life Insurance Corporation of India;

•
• (b) Seamen as defined in clause (42) of section 3 of the Merchant Shipping Act,
1958;
• (c) Employees registered or listed under any scheme made under the Dock
Workers (Regulation of Employment) Act, 1948, and employed by registered or
listed employers;
• Central Government or a State Government Employees

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• Universities and other educational institutions;
• (iii) Institutions including hospitals, chamber of commerce and social welfare
institutions established not for purposes of profit;
• (f) Employees employed by the Reserve Bank of India;

• g) Employees employed by public sector financial institution other than a banking
company, which the Central Government may, by notification, specify, having
regard to—
• (i) Its capital structure;
• (ii) Its objectives and the nature of its activities;
• (iii) The nature and extent of financial assistance or any concession given to it by
the Government; and
• (iv) Any other relevant factor;
• (h) Employees employed by inland water transport establishments operating on
routes passing through any other country; and
• (i) Employees of any other establishment which the appropriate Government
may, by notification, exempt having regard to the overall benefits under any
other scheme of profit sharing available in such establishments to the
employees.
Task 1
Jk Spinning has employed casual and seasonal workers in the establishment they have
worked for 75 days in the establishment. Are they eligible for Bonus
Task 2
Airtel employees laying a tower in Assam for 45 days. Are they covered by the
legislation.
Task 3.
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The Management of Satyabama University runs buses for the transportation of its
students, teaching and non-teaching staff to the University, both morning and evening,
and collects, according to the Union, substantial transportation fee from the students
as well as the employees using the facility, in addition to the tuition fee collected from
the students. Are the drivers eligible for Bonus?
Task 2.
JKSRTC was established to provide transportation service to people. Can the workers
claim Bonus?
Curious Case of PSUs.
If in any accounting year an establishment in public sector sells any goods produced or
manufactured by it or render any services, in competition with an establishment in
private sector, and the income from such sale or services or both, is not less than
twenty per cent of the gross income of the establishment in private sector for that
year, then, the provisions of this Chapter shall apply in relation to such establishment in
public sector as they apply in relation to a like establishment in private sector. The
problem here is the fact that “Gross Income” is not defined in this code.
Task
Identify if Bonus is applicable to these institutions
HAL
PNB
ISRO
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Delhi Electricity Board
Salary
In case an employee is drawing wages/salary @ Rs 11,000 per month but his wages are
not in the Scheduled Employment under the Minimum Wages Act, 1948 then for
calculation of bonus his wages will be treated as Rs 7,000 per month. So far as
calculation of the managerial and supervisory staff is concerned, even though their
wage/salary happens to be above Rs 7,000 p.m., they may not be getting bonus on
actual salary in case the scheduled employment are silent about their category of
employees in view of the definition of "employee" as given in clause (i) of the Minimum
Wages Act
Means all remuneration (other than remuneration in respect of overtime work) capable
of being expressed in terms of money which would, if the terms of employment were
fulfilled, be payable to an employee in respect of his employment and includes
dearness allowance (all cash payments, by whatever name called, paid to an employee
on account of rise in the cost of living) but does not include-
•any other allowance which the employee is for the time being entitled to;
•The value of any house-accommodation, supply of light, water, medical attendance or

other amenities
Held to be wages-
•Dearness or Variable Allowance
•Retaining Allowance•City Compensatory Allowance
•Lay Off Compensation paid to the workmen during lay off.
Held not to be wages-
•Ad hoc Allowance, Family Allowance
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• Tiffin Allowance
•Subsistence Allowance
•Value of Uniform and Chappals
•Commission payable to the Salesmen
Forfeiture of Bonus
Under labour law in India, can an employer forfeit Bonus payable under The Payment
of Bonus Act, 1965?
The Payment of Bonus Act provides for payment of Minimum Bonus and Maximum
Bonus. However, the employer also has right to forfeit the Bonus under circumstances.
Section 9 of the Payment of Bonus Act, 1965 states that notwithstanding anything
contained in the Act;
“An employee shall be disqualified from receiving bonus under this Act, if he is
dismissed from his service for-
(a) Fraud; or
(b) Riotous or violent behaviour while on the premises of the establishment; or
(c) Theft, misappropriation or sabotage of any property of the establishment.”
Section 18 of the Act states;
“Where in any accounting year, an employee is found guilty of misconduct causing

financial loss to the employer, then, it shall, be lawful for the employer to deduct the
amount of loss from the amount of bonus payable by him to the employee under this
Act in respect of that accounting year only and the employee shall be entitled to
receive the balance, if any.”
Task
Prajwal was found to be guilty of illegal strike and sloganeering. He was penalized with
a loss of increment and forfeiture of Bonus. Is it an allowed practice?
Task
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Rohit was the erstwhile workman of the JSW employed as a Supervisor and was
dismissed from service for proved misconduct of riotous and disorderly behaviour of
assaulting and gheraoing 4 Managers of the company by virtue of an order of dismissal
dated 2-8-2023. He is demanding Bonus Pay for the previous year contending that
bonus of the current year can only be withheld. ?
Task:
Rohit was terminated after Internal Complaints Committee found him guilty of sexually
abusing interns. He was terminated from service can his bonus be withheld.
Task
Raul was in charge of the warehouse. He failed to secure the latch of the ware house
leading to Loss of tools worth Rs. 15,000. The money was deducted as damages from
his wages. Can the company withhold Bonus

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Payment of

DATE \@ "MMMM d" \* MERGEFORMAT July

From the side of the Establishment

From the side of the Employee

• (a) Employees employed by the Life Insurance Corporation of India;

• Central Government or a State Government Employees

• (f) Employees employed by the Reserve Bank of India;

Curious Case of PSUs.

•The value of any house-accommodation, supply of light, water, medical attendance or

Section 18 of the Act states;

“Where in any accounting year, an employee is found guilty of misconduct causing

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