Employee Left Before Bonus Payout: What Happens to Their Bonus According to the Bonus Act?

Hello friend, please clarify that an employee who has left the organization and could not receive his bonus for that year. What will be his bonus? Is there any rule to deposit the non-payable amount of the bonus? Please reply as per the Bonus Act.

Dear employee,

Those whose basic salary is less than $10,000 per month are entitled to receive a bonus as long as they remain employed by the organization. If an employee has not yet collected their bonus, please send a money order to their latest known address.

Regards,
JS Malik

Thank you, Mr. Malik.
But please inform me if there are any provisions in the Bonus Act to open a separate account operated by the employer or government authorities.

Hi,

If a bonus is neither paid to a person nor by any other means, then it should be deposited in the LWF. When the person comes to collect the same, we will send him to collect it from the LWF offices.

Regards

Mr. Karnarun,

As per the Industrial Employment (Standing Orders) Act of 1946, if the workman so desires, the unpaid wages and other dues payable to him shall be remitted to his address by money order after deducting therefrom the money order commission charges. If it is unclaimed, then it can be deposited with the labor commissioner.

Does it mean employees at any cadre?
I heard bonuses are applicable only for workers and not for the staff. Please clarify.

Amit

Please appreciate the following clarifications:

1. Employees on a salary of Rs. 10,000/- per month or less are entitled to a Bonus.
2. Any employee who has worked for at least 30 days in the applicable financial year is entitled to receive the Bonus as declared by the Company.
3. An ex-employee, if he fulfills the eligibility conditions, is also entitled to receive the Bonus, just like the other regular employees on the Company's payroll.
4. Unpaid wages and Bonus, after a certain period (I am not too sure about the timeframe. I think it is two years), are required to be deposited in the Labour Welfare Fund with the Labour Welfare Commissioner.
5. The best way to handle such matters is to send the due money to the ex-employee at his last known address.
6. It is wrong to believe that only workers are entitled to a Bonus.

Cheers!!!!
Vasant Nair

After going through the discussion, one point was missing which needs clarification: As per the provisions of the Bonus Act 1965, the eligibility condition is that one must have worked not less than 30 days in the year to be eligible for a bonus.

Points of Discussion

1. If a person joined on 5.3.2012 (FY 2012-13), will he get the bonus for FY 2011-12 if the employee is still working in FY 12-13?
2. If the person left on 25.04.2013, will he get the bonus for FY 2013-14 in the Full and Final Settlement, considering the date of joining is 01.01.2010?

My concern is: In both conditions, the person has not completed a minimum of 30 days in a particular financial year, but the length of service is long, say, 3+ years.

Note: I need a legal answer, not any organizational practice. Response awaited from all experts.

Best regards,
Arun Kumar

In the first case, the employee is not eligible for a bonus for FY 2011-12, as "Any employee who has worked for at least 30 days in the applicable financial year is entitled to receive a bonus."

In the second case, the employee is not eligible for a bonus for FY 2013-14, with the same logic/law. However, his DOJ is 01.01.2010, so he is eligible for a bonus in FY 2009-10, FY 2010-11, and FY 2011-12, provided he has worked for at least 30 days in the applicable financial year.

Trust this suffices!

Thanks & Regards,
Murali