Are Charitable Trusts Like Hospitals Covered Under the Bonus Act? Seeking Clarity for My Client

Do charitable trusts are covered under the Bonus Act? Please explain. This is for my client who has been running a hospital under a charitable trust. Please explain elaborately.

Victor

Hospitals come under the Shops and Commercial Establishments Act, and therefore, are covered by the Payment of Bonus Act and other labor enactments such as the Payment of Wages Act, Minimum Wages Act, Employees' Provident Fund and Miscellaneous Provisions Act, Maternity Benefit Act, etc.

If charitable institutions are to be exempted from the operation of labor laws, there cannot be found any establishment that is non-charitable on paper!

Regards, Madhu.T.K

If it's covered under any act, and where there are 20 or more employees, the bonus act should be implemented.

Dear Friend,

I fully agree with Madhu TK. However, while covering the establishment under the Payment of Bonus Act, 1965, the labor department looks for the basic objectives of the charitable institution. If the objectives are entirely for charitable purpose i.e. on a no-profit-no-loss basis and for the downtrodden of society, you may get an exemption from the department. This I am telling you out of my own experience where a case was filed by the union against a charitable hospital under the Bonus Act, and the management won the case only based on "the objectives of the charitable institution."