How Should Bonuses Be Calculated for Employees with Different Attendance Records?

Two persons, A and B, have salaries of Rs. 8000 each. A earned Rs. 96000, and B earned Rs. 48000 (he attended work every month but was absent from work almost 15 days a month due to the ill health of family members) in a particular year. The company has declared a 15% bonus for that year. Since both have earned more than Rs. 42000, will both get 15% of Rs. 42000 (Rs. 6300), or will A get Rs. 6300 and B Rs. 3150? Thanks.

Loss of pay in this case (where salary exceeds Rs. 3500) is proportionately deducted from the bonus-eligible salary. Therefore, A will get Rs. 6300, whereas B will get Rs. 3150 only.

Regards,
Madhu T.K

Thank you for your clarification. Certain trade unions have been advising their members that regardless of the number of days worked, the bonus will be calculated based on the net amount earned if it exceeds 42000/-. This information was personally conveyed to me by the secretary of a union. I disputed this assertion, stating that it defies common sense and cannot be true. However, he insisted that there is a judgment supporting this claim, though he has not yet shown it to me. I also mentioned that judgments are often taken out of context and higher courts have criticized lower courts for issuing absurd judgments.

My purpose in sharing this is to draw attention to such disputes so that readers can benefit from the valuable clarifications provided by you. Thank you.

Dear Mr. Gopalen,

While agreeing with Mr. Madhus's post, I am enclosing a file on the Payment of Bonus Act, wherein I have marked the specific class with "Blue". I hope this will satisfy your requirement. Please note that certain limits on the above files are to be updated as per the latest notifications.

Regards,
Balamurugan Sivaprakasam
Head- HR
ICIL-MM Nagar

Today, we received a copy of a judgment from the union. Based on this, the union is claiming that the bonus will have to be paid on the 42000/- and not the proportionate wage if the net earnings of Basic and DA exceed 42000/-. The reference is WA No. 1043/1996 2001-I-LLJ. The matter pertains to Simpson & Co. The CMP No. is 15475/1996. I do not see the word "proportionate" used in any of the arguments or the judgment. Please advise.

Regards,
Gopalen

Dear Gopanen,

I have not seen the judgment, but I understand that it will be prejudicial to pay the same amount of bonus to two persons, one of whom has worked only for half the days than the other just because his salary is higher than the qualifying salary. If you could send the judgment, it would be of much help to all of us. Please attach the same for our record.

Regards,
Madhu.T.K

I have a Xerox of this and that too in tiny letters. I will try to attach a photographic copy.

Dear Mr. Madhu,

I have finally succeeded in attaching the document. My lawyer says this will be binding until challenged in the Supreme Court. I do not know why a big company like Simpson did not challenge this. Can anybody shed some light on this?

Gopalen