Is My Company Legally Required to Pay Extra Bonuses Despite Profit Growth?

Dear Seniors,

I'm a little bit confused about the bonus rules. Can anybody tell me if a company has been consistently giving bonuses and extra bonuses (Ex-Gratia) for several years due to yearly profit increases? Now, the company does not want to pay the extra bonus (Ex-Gratia) to employees, even though the company has experienced around a 10% growth in net profit.

Please suggest if there is any legal rule that binds the company to do so.

Regards,
Sorabh Gupta

Dear Sorabh Gupta,

Whether profits or no profits, the minimum bonus payable is 8.33%, and the maximum bonus payable is up to 20% when the allocable surplus exceeds the minimum bonus, subject to the condition that the amount of set-on and set-off has to be taken into account while determining the allocable surplus for the accounting year.

Ex-gratia cannot be claimed as a matter of right.