QUERIES
One of our ex-employees has raised a dispute on non-payment of bonus for FY2015-16.

When the increments were announced in Aug.2015, we had raised his salary from Rs. 27,500/- to Rs. 30,000/-.

But the concerned employee requested for a higher salary Rs. 35,000/- exactly, since he wanted to apply for a housing loan & this salary would fetch him the quantum of loan that he desired. But he wanted Rs. 35,000/-.

In larger company interest we raised the salary to Rs. 35,000/- but with a stipulation that no further payments will be demanded by him till he completes the job assigned to him.

Within a couple of months of getting the housing loan sanctioned, the employee expressed his desire to leave the job, however we reminded him of his obligations on the basis of which he was being paid much higher salary than he actually deserved. The quality of work was not satisfactory & in first week of May 2016, the employee produced a doctor's report that he suffered from work related stress & wanted to leave the job. We have relieved him & also cleared his salary for May 2016 & also facilitated settlement of PF dues.

In Oct. 2016, the employee demanded that he should be paid the bonus for FY2015-16. We pointed out to him, the condition laid down when he was given much higher salary & that the company has already paid him higher remuneration for 10 months from Aug.2015 to May 2016. However, the employee claims that there was no such understanding & he was given higher salary since he deserved it & was indispensable to the company.

However the employee, instead of raising a formal dispute has now involved a local politician for settlement in his favour.

Except for this employee, all others were eligible under the payment of bonus act.

Are we correct in denying the additional payment demanded as bonus. If not, should the amount be at the same rate as paid to other employees.

28th February 2017 From India, Mumbai

PARTICIPATING IN DISCUSSION:
Suresh2511
Labour Consultant
PL Kanthan
Proprietor
+4 Others

any payment paid in lieu of bonus every month does not deny an employee to claim bonus as disbursement of bonus is based on the performance of the company. If he raises a dispute before a labour forum you need to disburse minimum bonus before the Labour officer. The high handedness of politician has to be met by preferring a complaint with local police.
28th February 2017 From India, New Delhi
Before commenting, please note that his salary is Rs.35000/- per month (however break up is not available) as such he is not eligible for payment of bonus. Please go through the salary break up or share it for further comment.
P K Sharma
28th February 2017 From India, Delhi
Mr.Sharma is right.Only issue is that in case you have been paying him bonus even when rules did not demand so due to salary limit, he may create nuisance, for which you should be prepared. But no auth can force you to pay bonus as he had crossed salary limit of Rs 21,000/-
28th February 2017 From India, Delhi
How the bonus can be categorised in line of the right of an employee who is already following unethical behaviour towards his organisation , such an employee does not deserve to get any kind of terminal benefits till the time he does not follow his contract terms and conditions ,in view of the above candidate i would recommend that the medical report produced by him must be examined thourghly and re- medical may be undertaken ones if he is not fit medically 'then case may be channelised accordingly..
28th February 2017 From India, Mumbai
Thanks for the comments.
The consolidated salary is Rs. 35,000/- per month. PF, conveyance extra. PF paid on Rs. 15,000/-
He was the highest paid employee & all the remaining employees were below the revised limit of Rs. 21,000/- notified by the govt. in Dec. 2015. As for company performance, we are incurring a loss for last 2 years due to investments made in the project that this employee was handling.
28th February 2017 From India, Mumbai
Regarding comments of Mr. Kumar, since the company is more than 5 years old, payment of bonus to covered employees is a statutory obligation irrespective of the performance & the same has been discharged. As for a labour officer's approach in such a case, I believe that the ex-employee has no such intention & therefore has taken recourse to alternate means to press demand.
28th February 2017 From India, Mumbai
Dear All,
Since, this employee was getting more than 21,000 in addition to TA & PF, legally he is not eligible for bonus. If he is trying to arm twist using political outfit, the company has to play smart and may file a complaint with Labour Commissioner also.
Now, It is common for all the participants of this forum that now a days, employees are getting smarter by day & night, and it is for the HR Sections or Employers, to be more vigilant in maintaining the records and documents. The above incident is a fine example of the work force.
Gone are the days where employees used to have a feeling of sincere & ownership.
Rgds
28th February 2017 From India, Thane
Dear all,
In continuation to my earlier comments, it is now clarified that EPF benefits are being passed to the employee concerned at Rs.15000/- which means his Basic and DA, if any is Rs.15000/- per month and as such he is entitled for the payment of Bonus whether the establishment is in loss or profit.
P K Sharma
1st March 2017 From India, Delhi
Powercube has clearly mentioned that the disputed employee was drawing consolidated salary of Rs.35,000/- p.m. and hence not eligible for any Payment of Bonus according to amended Payment of Bonus Act. If an employee is drawing salary more than Rs.21,000/- per month (Basic + DA) than he is not eligible for any Bonus amount.
As regards to deduction of Provident Fund Contribution, it was rightly deducted as per PF Ceiling of Rs.15,000/-, it doesn't mean that his Basic salary was Rs.15,000/-.
Labour Officer cannot force or insist you to pay him Bonus, once you produced the records of his salary payment of Rs.35,000/- (Consolidated). Moreover, any payment is made on more than Rs.21,000/- is not called Bonus, its ex-gratia (gesture of goodwill), which no Company pays for ex-employees.
Regards,
Suresh
1st March 2017 From India, Thane

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