How Should We Propose Bonuses for Long-Serving Employees in a Non-Profitable Factory?

Good Evening, my name is Rakesh, and I work in an MNC. Our factory has been under construction for the past 4 years, and there has been no production yet. However, we currently have 45 employees. I would like to inquire about proposing a bonus for employees who have completed one year of service. Should the bonus be effective only once the company starts earning profits? Is there a specific time period typically established for awarding bonuses? Your suggestions on this matter would be greatly appreciated as we aim to present a clear proposal to the management. Thank you.

I would like you to go through the provisions of Section 16 of the Payment of Bonus Act, 1965, to get a clear picture of the bonus liability of a newly started establishment.

In the case of a new establishment undergoing the phase of gestation, there is no bonus liability towards the employees employed during such a period. During the first 5 years, the liability would arise only when production is commenced and profits are earned.