final bonus act

8/8/2019 Final Bonus Act

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By :

Anamika - 82086Vikas Mudgal - 82044

Nidhi - 82028


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Bonus is not defined in the Payment of

Bonus Act

It is an ex-gratia payment made by theemployer to his workers to provide a

stimulus for extra effort by them in the

production process.

It is a statuary requirement and isdifferent from other bonus like Diwali

,Durga Puja etc


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The Payment of Bonus Act provides for

payment of bonus to persons employed

in certain establishment on the basis of

profits or on the basis of production or

productivity and for matters connected

therein.


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The act aims at providing a simpler formulae for thepayment of bonus to persons employed in certainestablishment on the basis of production or productivity sothat disputes on this account are minimized.

Extend to whole of India and is applicable to every factoryas defined under the Factories act and every otherestablishment in which 20 or more person are employedon any day during an accounting year

It covers all employees (except apprentice) including

supervisors, Managers, Administrators,T

echnical &Clericals Staff employed on a salary or wage notexceeding Rs. 10000 per month. The salary or wage of aworker includes basic wage and dearness allowance only


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Labour Appellate Tribunal in AhemdabadTextile Mills Case gives LAT formulae todecide amount of profit to be given as bonus

LA

T= Gross Profit-[Depreciation+Rehabilitation (All Kinds) + 6% on paid up

Share Capital + Less than 6% on workingCapital

=Available Surplus

i.e. Gross Profit Prior Charges

From available surplus reasonable share ispaid as Bonus


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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 fornot less than thirty working days in that year


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employee means

any person (other than an apprentice) employed on a

salary or wage not exceeding three thousand and five

hundred rupees (Rs.10000/- amended ) per month in any

industry

to do any skilled or unskilled, manual, supervisory,

managerial, administrative, technical or clerical work

for hire or reward,

whether the terms of employment be express or implied;


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Work out and pay annual bonus to the

workers as required under this Act

Maintain registers and records related to

bonus

Provide required information to the

Inspector as per the act.


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Withhold payment of bonus to anemployee who has been dismissed forfraud , riotous and violent misbehavior

,theft etc. Deduction from the bonus y In case gift or customary bonus already paid

y Bonus already paid in advance

y Financial loss caused to the employer by themisconduct of the employee which has beenproved


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Claim bonus ; make an application for

the recovery of the bonus due to him

within one year of its becoming due to

the appropriate Government

Obtain clarification or information

relating to any item in the item in the

balance sheet or statement of profit andloss account which may be considered

necessary


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An employee shall be disqualified from receiving

bonus under this Act, if he is dismissed from

service for

fraud; or

riotous or violent behavior while on the premises

of the establishment; or

theft, misappropriation or sabotage of any

property of the establishment.


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Every employer shall be bound to pay to every eligible

employee in respect of the accounting year

a minimum bonus which shall be 8.33 per cent of the

salary or wages earned by the employee during the

accounting year or

one hundred rupees,(sixty rupees for employees below

15 years of age)

whichever is higher,

whether or not the employer has any allocable surplusin the accounting year


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Where an employee has not worked for all the

working days in an accounting year,

the minimum bonus of one hundred rupees or,

as the case may be, of sixty rupees,

if such bonus is higher than 8.33 per cent of his

salary or wage of the days he has worked in that

accounting year, shall be proportionately reduced


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an employee shall be deemed to have worked in an

establishment in also on the days on which

he has been laid off under an agreement or aspermitted by standing orders

he has been on leave with salary or wages

absent due to temporary disablement caused by

accident arising out of and in the course of hisemployment,

the employee has been on maternity leave with wages


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Where for any accounting year, the allocable surplus

exceeds the amount of maximum bonus payable to theemployees in the establishment under section 11, then,

the excess shall, subject to a limit of twenty per cent of

the total salary or wages of the employees employed in

the establishment in that accounting year, be carried

forward for being set on in the succeeding accountingyear and so on up to and inclusive of the fourth

accounting year to be utilized for the purpose of payment

of bonus.


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Where for any accounting year, there is no available

surplus or the allocable surplus in respect of that yearfalls short of the amount of minimum bonus payable to

the employees in the establishment under section 10,

and there is no amount or sufficient amount carried

forward and set on under sub-section (1) which could beutilized for the purpose of payment of the minimum

bonus, then such minimum amount or the deficiency, as

the case may be, shall be carried forward for being set off

in the succeeding accounting year and so on up to and

inclusive of the fourth accounting year


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In case of dispute between employer &

employee ,it comes within the purview of

Industrial Dispute Act & will be solved

accordingly.


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If any person contravenes any of the

provisions of this act or fails to comply

with the direction or requisition given by

the appropriate authorities shall bepunishable with imprisonment for a term

which may extend to six month , or with

fine which may extend to one thousandrupees or with both.


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Thank You

final bonus act

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