Can We Include a Bonus Clause in Appointment Letters and Is It Mandatory?

Gaurangi Shyam
Dear All, I wanted to understand if we can include a bonus-related clause in the appointment letter for workers. Also, is it mandatory to mention the same?

Regards,
Gaurangi
samvedan
Bonus, as commonly understood, is the statutory bonus under "The Payment of Bonus Act 1965." If the workmen are covered under the Act by the yardstick of their salary/wages, then you do not have to make any mention about "bonus" in the Appointment Letter. If anyone is not covered by the same yardstick, you should also not make any mention since if you do, it will become part of the terms and conditions of employment, and you will not be able to change the same in the future unilaterally! The law on the subject will protect the interests of both the employer and the employee in any event. In any case, it is NOT required by any law to state anything about a bonus in the Appointment Letter.

Clear?

Regards,
Samvedan
February 12, 2015
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