Can Employers Give Different Bonus Percentages to Same-Grade Employees Fairly?

Can an Employer Give Different Bonus Percentages to Employees of the Same Grade?

In general, employers have the discretion to determine bonus amounts based on various factors such as individual performance, contribution to the organization, and company policies. It is not uncommon for employers to provide different bonus percentages to employees within the same grade, as long as the differentiation is based on legitimate and non-discriminatory reasons.

However, it is important for employers to apply bonus policies fairly and transparently to avoid potential conflicts or perceptions of favoritism among employees. Clear communication about the criteria used to determine bonus amounts can help maintain employee morale and trust in the bonus process.

As per my opinion, he cannot do that. The Equal Remuneration Act strictly prohibits such kinds of malpractices.

Bonus Calculation

Normally, a bonus will be calculated on the total gross earned in the last financial year and will be multiplied by the bonus percentage, which may be 8.33% or beyond that. So, just at a glance, it cannot be identified whether an employee is given less bonus or more compared to another employee at the same grade. This difference may be due to the number of days he worked in the last financial year.

Minimum Bonus and Ex-Gratia

One more thing, as per the statutory obligations, one must be given a minimum of 8.33% bonus. Whatever exceeds this is called Ex-Gratia. When it comes to Ex-Gratia, the Equal Remuneration Act does not apply as it is the extra sum given for higher performance.

This is my understanding. Please let our seniors share their opinions and clarify this.