Is Bonus Eligibility a Thing for Hospitals in Maharashtra? Let's Discuss!

Dear Members,

Is a bonus applicable to the hospital industry in Maharashtra?

Thanks & Regards,
Sandip Sardesai

Dear Sandip,

Yes, a bonus is applicable to the hospital industry as well. In fact, it is applicable to every industry regardless of the nature of work, only if it falls under the guidelines and rules mentioned in the act.

Dear Manoj,

I think that you've just missed section 32 of the Payment of Bonus Act, 1965 by oversight. If I remember correctly, there are 8 classes of employees employed in certain establishments listed under section 32 which explicitly prohibit the application of the Act to such employees. Employees employed by hospitals established not for the purpose of profit are one among them. Sandip should note that this exemption does not apply to those corporate hospitals run for profit.

Dear Umakanthan.M,

Thank you very much for the conclusion. This means that if a hospital is run by a charitable trust, then and only then the bonus will not be applicable; otherwise, the bonus will be applicable for all, including the hospital industry.

Thanks and Regards,
Sandip Sardesai

Dear Mr. Sandip, you are wrongly interpreting the reply of Mr. Umakanthan, Sir. Please refer to The Payment of Bonus Act, 1965 - "Nothing in this Act shall apply to (c) Institutions (including Hospitals, Chambers of Commerce & Social Welfare Institutions) established not for purposes of PROFIT."

This should not be construed as "Bonus Act is not applicable to." It means if a hospital is run by a charitable trust, then and only then bonus will not be applicable. Who runs the hospital is not the criteria; how the hospital is run, whether free of cost or for commercial basis for commercial considerations. Please peruse the Christian Medical College Case.

Dear Mr. Srinath, yes, you and Mr. Umakanthan Sir are right. Thank you so much for sharing this type of knowledge with me. I was wrong. After your reply, I went through the Act and then I understood that, as per the "Payment of Bonus Act 1956" Clause No. 32 (V) (C) i.e., Act not to apply to certain classes of employees - nothing in this Act shall apply to institutions (including hospitals, chambers of commerce, and social welfare institutions) established not for profit purposes.

Now, I am confused again. If a hospital is a Pvt Ltd, then how can we determine whether the hospital is operating for profit or not?

Thanks and Regards,

Sandip Sardesai
Manager - Accounts and Finance

If the hospital is rendering "Free Service," it will not come under the purview of the Bonus Act. If the hospital is rendering service for commercial considerations, it comes under the purview of the Bonus Act.

Again, you have mistaken whether the hospital is running for the purpose of profit or not. This is not the criteria for determining the applicability of the Bonus Act. Hospitals established not for the purpose of profit are exempted from the purview of the Bonus Act.