Payment of Bonus Act Amendment Stayed: What Does the Kerala High Court's Decision Mean for 2015-16?

Dear All,

The Payment of Bonus Act amendment of 2015 has been stayed by the Kerala High Court and ordered to take effect from the financial year 2015-16. Please find attached a scanned copy of the stay order.

Thank you.

Dear Senior,

I am working in a manufacturing company in AP. Will this stay affect all states or only Kerala? Do all states in India need to follow this stay order or not? Please suggest.

No, Rakesh. This stay is valid only in Kerala. However, this stay would encourage other state employers to file writ petitions in the respective state high courts.

Valid only in Kerala for 14-15. For 15-16, it is still applicable (even in Kerala). The legality of the retroactive nature of the legislation seems to be in question. The attached decision is also not final; it is stayed pending final hearing. Other states may or may not follow this decision.

While speaking of the retrospective nature of decisions, there have been a plethora of laws/amendments that have been retroactive in effect.

Dear all,

First of all, please go through the entire stay order. Nowhere is it written that it is valid only for Kerala; it is a central act and applicable to the whole of India.

Regards,
Shashi Pandey/Shish Ram Uniyal

Dear Shri Pandey,

It does not have to be stated in the order. Every high court has jurisdiction over its own territory and not otherwise. That is why on one issue there can be conflicting views of 2 high courts. The Supreme Court is the only authority, the decision of which is binding on the entire country.

Thanks for posting a copy of the HC Stay Order. However, the stay is of a temporary nature, as the main petition is yet to be decided. The stay can still be vacated by the Central Government through a revision petition to the same HC or an appeal to the SC.

As per my interpretation, since the petitioners are two individual parties, not representatives of all employers within Indian territories, and their petition was not of the nature of a PIL, the stay is not likely to have universal application for all employers in India. Therefore, the stay applies only to their individual cases, as one of the reliefs requested through their petition, and not to all employers in India.

However, other employers are free to seek a stay on the analogy of the present stay through their own individual petitions, if they choose to file any. It won't affect them automatically, subject to further interpretation from individual HCs and the SC.

Regards

Hi Sir,

The United Plantation only filed a writ petition against the bonus amendment. Here, could you kindly let me know if this stay order will be applicable to all companies, or what? Kindly provide your views.

Regards,
Gobinathan

Yes, I read the same about the amendments online in other articles. As per CA Hitesh, the limit for coverage of employees and the limit for calculation of bonuses has been increased under the act. However, this has been stayed by the Kerala High Court. I am still confused about when these amendments are implemented. Is it retrospective or from 2015/16?