Dear all, I am facing a problem regarding bonus hike from 8.33 % to 20% as demanded by the union. Please suggest me a good solution to overcome this problem, as company is saying we wont be able to give 20% you have to find an alternative solution for that.
From India, Kolkata
Negotiate with the Union and bring it down to 10% this time. You can start with 9% and that will not be acceptable for the Union. Then offer a 0.5% increase and also offer that this time we won't be able to give more than 9.5% and can consider for an increase next year,provided the business prosper and profits go up. In the third negotiation they will bring their demand to 15%. You can again offer a 0.5% increase and make it 10%. A straight increase from 8.33% to 20% will not be entertained even by the dispute redressal authority,ie, Labour Officer, and make them aware of this fact and say that if you do not accept it, we will go for conciliation. Let them know that an increase from 8.33% to 20% is noway possible. If so, you can settle the issue at 10% or maximum 11%
From India, Kannur
Our learned friend Madhu has given a categorical reply on the aspect of practical bargaining by the Management on statutory bonus by step by step basis keeping the future in mind. At the same time, first, as a member of the Management's negotiation team, you have to ensure whether the demand by the union is only a routine one without considering the legal aspects of bonus just to kindle the expectation of its members for the sake of popularity; second and the most important, as a HR person, you have to see whether the available surplus for the AY of demand is computed by the Management on the basis of the principles of set on and set off as detailed under section 15 of the Payment of Bonus Act,1965 and then evaluate the justification behind the enhanced demand by the union. You have to remember that the maximum bonus of 20% is not an absolute condition but only the maximum limit of the range of consideration. The employer can advance an effective argument for any percentage less than 20% based on the amount set off against the previous years or the amount to be set on for the future.
From India, Salem

Union has pitched the demand high to put pressure on management.Heart of heart they know such increase in Bonus cannot happen over night.
So negotiate calmly and as Learned member Madhu said make a counter offer, after considering your financial status, chances of production, profit in the future years etc and then offer what management feels is affordable.
Stick to lower level of increase as reducing bonus rates subsequently will give rise to heartburn and unrest.

From India, Pune
All the senior members have given their suggestions to move in the matter.
As an HR you should know why such demand of 20% has come aginst 8.33% bonus payment from the union. You have to understand the pulse of the management how much you can afford. The information of demand by the union to be brought to the notice of labour department. This is not an easy task but one has to involve as a whole and to be diplomatic.
Start discussion what with union what wefare management has plan for the employee and the difficulties lies before managemnt. Keep the key members of the Union in your fold and create an atmosphere for your result. A good bargainer is a sucessful Negotiator. Do not mind for rounds of meetings or expense on that aspect idcuss with a friendly atmosphere. Take the minitues of each sitting. As suggested anything within 10-11 % is good move.

From India, Mumbai
Dear All,
Payment of Bonus Act is absolutely clear to determine % of bonus based on available surplus, allocable surplus, Set on & Set off. If the organization has paid 8.33% based on Payment of Bonus Act, then there should not be any problem even if it is challenged under court of law. But if it is not, then it is a problem.
Demand of Union is a different subject. If the calculation is as per Payment of Bonus Act, please open the card and show it to union. Bargain if necessary. But my suggestion if payment of bonus act does not allow to pay as per calculation more than 8.33%, do not pay the extra amount if necessary as bonus instead pay as exgratia. Otherwise in future for continuous payment of bonus ignoring the method of arriving % of bonus - will be considered as customary bonus .
Thanks & Regards,
S K Bandyopadhyay( WB, Howrah)
+91 98310 81531

From India, New Delhi
Thank you all for your valuable feedback. I really appreciate for your suggestions.
From India, Kolkata

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