Can a Wrongfully Terminated Employee Claim Bonus for the Time They Were Out? Seeking Advice on Bonus Act Implications

Dear All, I seek advice on a situation where a workman/employee has been unlawfully dismissed or terminated from services, but the termination has been overturned by the labor court. In this scenario, is the workman eligible for a bonus for the period he was terminated, not due to his fault? Reference is made to Section 8 of the Bonus Act, which states that the workman should be present for a minimum of 30 days during the year.

Kindly share your advice and views on this matter.

Regards,
Brijesh

To determine his eligibility or non-eligibility, you must refer to the report of the domestic inquiry. If he is not found guilty, then you must pay him a bonus.

You have stated in your post that the dismissal of the workman has been set aside by the Labour Court. The award of the Labour Court in this case has to be read fully before any view could be given on the issue raised by you. Otherwise, the view may be incorrect and will not help you.

With regards,

Dear All,

Thanks for the reply and guidance. From Mr. Harikrishnan's perspective, I would like to add that the labor court's award has stated the reinstatement of the worker with full wages, making his termination void.

However, the award does not mention anything about the payment of a bonus for the period when the worker was not on duty due to the termination. My concern is regarding Section 8 of the Payment of Bonus Act, which states that a worker must be present on duty for at least 30 days in a year to be eligible for a bonus. In this case, the worker was not on duty through no fault of his own.

According to the provisions of the act, he is deemed ineligible for a bonus. As an HR professional, what should be my stance on this issue?

Regards,
Brijesh

Dear Mr. Brijeah, As the Labour Court has awarded reinstatement with full wages, the worker is deemed to be in service during the period of his dismissal and is entitled to a bonus subject to the eligibility conditions contained in the Payment of Bonus Act. Since you are paying "wages" for the period of his dismissal, he is deemed to have worked.

With regards

Dear Mr. Brijesh,

The following is an extract of a portion of the judgment of the Honourable Supreme Court of India in Gammon India Ltd. vs Niranjan Dass reported in 1984 (1) LLN 90.

"In the course of the hearing of this appeal, it was stated that the respondent has reached the age of superannuation; therefore, physical reinstatement in service is not possible. The appellant will have to establish that fact. But in the event the appellant shows that under a valid rule, the respondent has reached the stage of superannuation, and therefore physical reinstatement is not possible, it is hereby declared that the respondent shall continue to be in service uninterruptedly from the date of the attempted termination of service till the date of superannuation. The respondent would be entitled to all back wages, including the benefit of revised wages or salary if during the period there is a revision of pay-scales with yearly increments, revised dearness allowance or variable dearness allowance, and all terminal benefits if he has reached the age of superannuation, such as Provident Fund, Gratuity, etc. Back wages should be calculated as if the respondent continued in service uninterrupted. He is also entitled to leave encashment and bonus if other workmen in the same category were paid the same."

The above extract directly answers your query. You can read the full judgment on the official website of the Honourable Supreme Court of India.

Regards,