Bonus - Is Ex Gratia Mandatory Or We Can Avoid Ex Gratia?

Dear Seniors
Please hep me out. If any employee which basic salary is above 10000/- can we give him bonus. And if we give him ex-gratia is ex gratia mandatory or we can avoid ex gratia.
thanks
Amit Sharma

Dear Amit,
If any employee basic salary is above 10,000 then No employer is liable to pay bonus. Even Employee can't file any legal dispute case against Company too.
Generally to Motivate employees & better Industrial environment companies pay them in the ex-Gratia term. But statutorily No employer bound to give Bonus above basic 10,000.
For any further query you can discus.
Ratikanta Rath

Yes, U can give bonus though Basic is > 10000 & Ex-gratia is not mandatory. It is purely the discretion of the management to pay exgratia. Normally when an amount is paid to the employees who are not coverable under the Payment of Bonus Act and when some amount is given in excess to the ceiling prescribed under the Act (Bonus earnings restricted to Rs.3500/- per month), it will be termed as Exgratia in the bilateral/tripartite settlements.
Normally exgratia is the amount paid to the employees in recognition of their cooperation and contribution. The employees have no right to demand exgratia unless it is contemplated in a settlement between the employer and employee.

Even paying the Ex-gratia you should be very careful. Bonus is a statutory obligation hence whether your company is running with profits or losses you should pay a minimum bonus but not in the case of ex-gratia. Unfortunately there is a critical word in english "Practice" this place a vital role hence when you are paying the ex-gratia you should take an undertaking from each employee that they should not quote this as a precedent and demand next year also.
If the company is in profits they will be paying the ex-gratia but like the bonus there is no obligation for exgratia.
Regards - kamesh

Hi,
can anyone advice me?
1. Im a HR professional working with a company in kerala. my monthly gross is Rs. 15000/-. My company employs only 6 employees. i want to know will there be deductions like esi and pf in my salary.
2. when i move from this job will the new employer ask me previous esi or pf form what will i do then, which document can i produce to state that i was not eligible for esi or pf?

Dear Renu,
For your first query, Since as u are saying only 6 employee are working in your company so company will not deduct Epf & Esi from your salary. As you are aware for getting EPF Code(20) no. of employee required. & ESI Code(10) no. of employee required.
For your Second query No employer will ask for any previous Employer EPF Detail.
Ratikanta Rath

Even if they ask also you tell the fact. Nowadays every employer is enquiring about the previous company and also enquiring with the previous employer.
ESI & PF are the statutory obligations & any employer will invite problems untils unless they are not covered. One advise is either you have to keep to your monthly pay slip or request the management to deposit your salary in to bank directly so that you have a proof.
Regards - kamesh

Dear Seniors
Myself Subhajit, Asst. Manager HR in our companies.
Please help me out.
Recently we pay the bonus one employee who’s his Basic Salary is 10, 000 /- p/m. And we are give him the bonus Rs.10, 000 /- , and no pay ex gratia. Is it right or wrong?
Thanks,
Subhajit Bhowmick

Dear Subhajit,
If for 1 month then As Per Bonus act in C register u have to show Rs./-3500 for statutory Purpose and rest amount 6500 show in ex-Gratia head.
Ratikanta Rath

Statutory liablity for payment of bonus is rs. 10000/- (basic+da) exgartia payment is sole liablity of employer.
sumit