Bonus Bill In Lok Sabha

Dear All:

Recently the Bonus bill has been passed in Lok Sabha revising the Bonus wage ceiling for calculation to Rs.7000/- giving effect retrospectively i.e. 01.04.2014. It is the practice that employer is paying maximum bonus in complying the provisions of the Bonus Act. Apart from this maximum bonus of 20% permissible under the Act, employees are being paid a sizable amount as Ex-gratia (in different form Dress Coupon and a further lumpsum totaling more than the 20% maximum bonus permissible) in complying the request of the Union referring that the Maximum Bonus payable under the Act is not sufficient for them to meet out their needs. The Bonus Payment and the Exgratia payments are being made out to the employees after entering into a settlement u/s 18(1) of the I.D Act with the Trade Union.

Likewise, the employees who come out of the purview of Bonus Act is being paid as Incentive every year.

Now my query on the above points is as to whether the Ex-gratia apart from Bonus and the Incentives paid to such of those employees, can be adjusted against the arrears of Bonus, if any, is become payable for 2014-15.

Request Experts views in this Bonus Matter.

Regards,

" Ex-gratia " a Latin term which literally means " from favour " or " out of goodwill ". In the matter of any payment made by one to another it implies a discretionary voluntariness to pay on the part of the payer and does not create any simultaneous as well as consequential right to demand on the part of the payee. " Incentive " on the contrary, is the financial scheme devised to increse the earnings of employees in tune with the rise in their productivity over and above the normal rate in a given stretch of time. That's why such earnings are not included in the definition of salary or wage under the Bonus Act,1965.The bonus described and dealt with in the Payment of Bonus Act,1965 is, in essence, a share of the profits of the establishment due to the employees. Therefore, they can not be adjusted against the arrears of the bonus payable under the Act.