Labour Law & Hr Consultant
Industrial Relations And Labour Laws
Freelancer In Hr &indirect Taxes For
Consultant For Social Compliance, Factory
Mir Muzamil
Head Hr/operations.
+4 Others

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Hello all. We have a factory and a warehouse near to each other(within say 100 feet) separated by a pubic road. both are different building.
warehouse comes under shops act and its min wages is much less than factory.
recently we have distributed bonus as per applicable min wage in both premises. so we paid less amount as bonus to warehouse employees as their min wages is less. Employees are unhappy on this and urging to pay the balance in compared to factory team.
now, is it mandatory to keep uniform bonus amount to both side employees irrespective of min wages?
What should i do now?

Dear MK,
There can be uniformity only in the percentage of the bonus and not the actual amount of bonus calculated on the basis of that percentage. If the actual wages are comparatively less, the amount of bonus would also be less. When the wages were determined as per minimum wage rates fixed by the Govt. in respect of the different employments and the same is adopted by the Company that owns a factory and a warehouse, company cannot declare different rates of bonus. Therefore, it is not mandatory to do so.

Both the units are managed and controlled by one employer. As such strictly going by law is unfair. If you have different salary levels like warehouse employees are paid less than factory employees, obviously, a difference in bonus is admissible because bonus is based on salary and as such those who get less salary would get lesser bonus than those who get salary higher than them. Now applying the bonus calculation method also, you are expected to calculate it on minimum wages OR actual wages whichever is higher. Normally, for application of Bonus Act the units of one employer can be clubbed together. In this case warehouse is an extension of the factory only and I don't think that you have separate balance sheet for warehouse. Therefore, I support the demand of the workers in warehouse and advise that they should also be paid bonus equal to factory workers.
Dear mani Please share if the ware house is having a seperate registration....??????
Factory and warehouse will have different registration because factory is covered under Factories Act and the warehouse comes under the state Shops and Commercial Establishments Act. But that does not make any difference.
From an ethical point of view, I will have no hesitation in concurring with my dear friend Mr.Madhu.
However, there are other reasons of practical considerations underlying my above answer.
Fortunately, the warehouse's location in the present case is very near just across the same street or road where the factory is. In case, if it is situated elsewhere like some other district or State?
Wage or salary fixation, whether done by the employer unilaterally on his own or as per the rates fixed under the Minimum Wages Act,1948 or even bilaterally through the process of Collective Bargaining, difference in wage structure would be bound to be there because of the nature of work in the different types of establishments owned by the same organization, of course, with a common balance sheet.
Therefore, it is impossible to establish uniformity in the actual amount of bonus receivable with the same percentage of bonus. Similarly, equally impossible would be the attempt to have different percentage of bonus to the employees of different types of establishments coming under the same Company to ensure uniformity in the amount of bonus actually receivable.
It may be possible if and only if common cadres of employment are created across the various establishments coming under the same business entity.

% of Bonus is arrived from allocable surplus and the salary level of eligible employee against one balance sheet. This problem is also evident with Organizations having one balance sheet but units in different states.
Now against the allocable surplus of a balance sheet and different minimum wages for different states/jobs , there is possibility that % of bonus will be different for different locations against one balance sheet. For example with an allocable surplus against one balance sheet with respect to minimum wage of say WB 18%, Maharashtra 16% and Odisha 20%. This is complicated situation.
Moreover, Set on and Set Off amount will also be different for differential amount of actual Bonus Payment in different locations. To my opinion it may be the highest minimum wage % to be paid for all and that may be the calculation basis every year.
Requesting others to opine in this respect.
S K Bandyopadhyay ( WB, Howrah)
+91 98310 81531

As per bonus act whichever you paid is correct only, different nature of work decides and varies in minimum wages notification. Need not to worry. Try to explain the employees nature job of manufacturing and Ware house.
Statutory Bonus is applicable,
Amount of Bonus is calculated over Basic and DA Fixed.
Apart from this, Where ever Company is in Profit and if bonus is required to be fixed as per surplus allocation. Then Max limit of Bonus% universally may be fixed.In either Case there can not be a fixed amount as such but the fixed %.

Check the minimum wages to be paid as per your Industry as you registered. Pay the Bonus on same ratio to all the employees. Final Bonus amount may be less or high as per their wages and attendance, which doesn't make any issue.
Good Luck.

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