Facing Bonus Denial from NGO Due to Job Non-Confirmation: What Are My Rights?

Dear Experts, I joined the NGO on 15th Aug '12, and my last day of work was 19th Nov '13. I received the termination letter on 18th Oct '13, and the NGO is not ready to release the bonus due to non-confirmation of the job.

Terms and Conditions of the Bonus Act

What do the terms and conditions of the bonus act say regarding the above issue? How many months' salary can I expect from the NGO on my last day? Please help me with this.

Regards, Ramesh Tank

Your information suggests that your job was not confirmed. Please confirm a few points. First, do you have an appointment letter, and are you receiving pay on rolls? Are your PF or ESI deductions being done? Moreover, do you have an attendance record in the company? The Bonus Act states that even if you work for 30 working days in a year, you are eligible for a bonus for those working days only. So please check.

Regards,
Srihari

Have you got the dates right? You say your last working date is 19th Nov '13 - we are on 10th Nov 2013 today. And you also say you got the termination letter on 18th Oct 2013 - which would mean that you are not working there now. A bit conflicting. Can you give better clarity on your actual situation?

Regards,
TS

As per the provisions of the Payment of Bonus Act 1965, Section 8 prescribes the eligibility for a bonus: Every employee shall be entitled to a paid bonus by their employer in an accounting year, in accordance with the provisions of this Act, provided they have worked in the establishment for not less than thirty days in that year.

The Act nowhere states that an employee should have been in confirmed service. You are definitely entitled to be paid a bonus by the employer.

Dear Ramesh Tonk,

Eligibility for Bonus Under the Payment of Bonus Act 1965

As per the provisions of the Payment of Bonus Act 1965, Section 8 prescribes the eligibility for a bonus: Every employee shall be entitled to a paid bonus by their employer in an accounting year, in accordance with the provisions of this Act, provided they have worked in the establishment for not less than thirty days in that year.

The Act does not state that an employee should have been in confirmed service. You are definitely entitled to be paid a bonus by the employer.

Questions Regarding NGO Bonus Allocation

Just to ask, an NGO is a non-profit organization, so how is profit allocated for a bonus as per the POB Act? Secondly, we are not assured of the reason for the employee's termination. Was there any fraud/crime committed? Before coming to any conclusion, it is better to know the facts first and then guide, as I suggest.

Regards,
rldhingra

Appointment letter is with me. There is no payroll register maintained by the NGO, but the salary is credited to the bank account. There are no PF or ESI deductions. The service period has not been confirmed by the NGO.

Thank you,
Ramesh Tank

Have you got the dates right? You say your last working date is 19th Nov '13—we are on 10th Nov, 2013, today. And you also say you got the termination letter on 18th Oct, 2013, which would mean that you are not working there now. A bit conflicting. Can you give better clarity on your actual situation?

One month in advance, they issued this termination letter (issue date 18th Oct '13 & Last date 19th Nov '13). One week to pass this NGO as per their letter.

Thanking you,
Ramesh Tank

Termination and Bonus Calculation Issue

Our MD recruited a lady and issued the termination letter to me with one month's advance notice without a bonus. Meanwhile, our office boy received a bonus; the details of the calculation are as follows:

- September '12 to March '13: considered as the probation period
- April '13 to October '13: total of 7 months; an average salary was taken, and 50% of the average salary was paid as a bonus.

For example, if the 7-month salary was Rs. 40,000, it would be divided by 7 to get an average monthly salary of Rs. 5,714. Then, 50% of this average salary, i.e., Rs. 2,857, was paid as a bonus.

Which clause does the NGO consider in this issue?

Kind Regards,
Regards

The calculation given by you is not as per the POB Act. Now, whatever the MD has given to the office boy may be an ex-gratia. Ex-gratia cannot be demanded by any employee; it is given as a gesture to the employee. Since your case is termination, the MD thought of not giving the ex-gratia to you.

Only the thing here is that he released the amount in the name of "BONUS" instead of Ex-gratia. Normally, ex-gratia is released in Feb/Mar, i.e., before the financial year-end, not during Diwali. May I correct?

I just want to know if, in this case, I am eligible to receive ex-gratia without job confirmation and one year of service. Should I raise this issue with management through the Labor officer?

Thank you,

Ramesh Tank

Understanding Ex Gratia in India

In India, people also refer to Ex-gratia as a Bonus. There is no fixed month for distributing Ex-gratia, nor is there any specific law governing it. Ex-gratia cannot be demanded; it is more akin to a tip or a gesture from the MD/Owner. Regarding your intent to pursue this matter through a Labour Officer, I will not discourage you, though it is unlikely they will be able to offer much assistance.