Sibabrata.majumdar
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Dear Seniors,
I am aware that an employee who leaves a firm is eligible for bonus if he has completed the requisite working days in any financial year. What about an employee who is being paid ex gratia as his salary is beyond 10,000/-
1) Can he claim ex-gratia when he leaves the firm after working for more than 30 days in a financial period. ?
2) Will be paid ex-gratia as per his last drawn salary?
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As discussed earlier Ex-Gratia is a sum of money paid out of kindness and voluntarily there is no obligation/compulsion to pay, hence there is no liability on the employer to pay Ex Gratia and neither the employee can claim too.
Apart from the legality if the employer would like to pay Ex Gratia they can, and it would be accounted for in the books of accounts. There is no due diligence for Ex Gratia as such.
Thank you Mr. Saji for your prompt response. The only doubt I had is suppose an employee's salary was 40000/- He left the firm to go abroad. However he returned after 6 months and joined the same company around Diwali.
Now we treated him as a new employee and gave him festival bonus as applicable to new joinees of the company. However he is claiming bonus for the period when he was working with the company. He had worked from April 12 to Feb 13 that is 11 months in the financial year 12-13. Since his salary was beyond the bonus limit is he applicable for bonus? Can he claim ex-gratia in this regard?

In legal terms, No he cannot claim Ex Gratia,
Prior to that would like to know that had the employer gave any commitment through Appointment Letter that he will be paid Ex Gratia, if so the employer has to, if not then no need to give.
As I said earlier if the employer would like to compensate for the 11 months he worked for Ex Gratia, then no one can stop the employer. But there is no compulsion.
Hi Tittli,
Legally speaking a person is drawing an ex-gartia amount beyond Rs 10,000/ pm is not entitled to receive bonus under the Bonus Act. T
Salary or wgaes includes dearness allowance but no other allowances.e.g house rent,incentive or commissionhe and bonus is paid to those employees whose salary / wages not exceeding Rs 10,000/ pm (only basic & da) provided they have worked at least 30 working days in a fiancial year of the company. Time limit for payment of Bonus is within 8 months from the close of accounting year of the company.
Thanks & Regards,
Hi Titli,
As my fellow friends have already stated that under Bonus Act, an employee having gross salary of more than 10000 pm cannot claim for any bonus. However giving bonus to employees having gross salary of more than 10000 pm is solely the discretion of company. In your case, legally the said employee cannot claim for the bonus even at the time when he had left the organisation, and now when he re joined again he will be treated as a fresh new joinee so there is no point at all of his claiming for bonus for his last employment which he had with your company. I have faced such situations many a times when I have hired ex employees wherein they wanted previous such settlements, well you just need to counsel such employees and make their concepts clear about Resignation and New joining.
Hi all
If the payout of Ex-Gratia is decided as Sept of a financial year.
I would like to know if Ex-gratia is paid on a pro-rata basis to an employee who leaves in the mid of the financial year
Dear CuriousBee
Ex Gratia is paid voluntarily, out of kindness or grace. There is no legal obligation hence it depends upon the employer, and if an employee works for 3-4 months he/she will not be entitled for Ex Gratia for the entire year as such it will be on pro rata basis only. Also read the terms of the Appointment with regards to Ex Gratia Payment to have a clear idea
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