Company Background and Union Involvement
My company's construction started on 24th July 2007, and commercial production began on 1st April 2008. There are two trade unions: INTUC and CITU. The company is recognized with INTUC.
Ex-Gratia Payment Announcement
During this Dussehra festival, management announced an ex-gratia payment of about ₹2500 for every employee after discussions with INTUC office bearers. However, CITU members argued with the management, questioning how the ex-gratia was announced. Referring to the Bonus Act of 1965, they pointed out that the minimum bonus of 8.33% should be paid. A letter was submitted to the management regarding this matter.
Union Actions and Inquiry
They proceeded to the DCL office and submitted a letter addressing this issue.
I would like to inquire whether the bonus is eligible or not. If it is eligible, what are the criteria? If it is not eligible, what steps should I take? Please help me, sir.
Thanks & Regards,
A. Mahesh
From India, Hyderabad
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1My company's construction started on 24th July 2007, and commercial production began on 1st April 2008. There are two trade unions: INTUC and CITU. The company is recognized with INTUC.
Ex-Gratia Payment Announcement
During this Dussehra festival, management announced an ex-gratia payment of about ₹2500 for every employee after discussions with INTUC office bearers. However, CITU members argued with the management, questioning how the ex-gratia was announced. Referring to the Bonus Act of 1965, they pointed out that the minimum bonus of 8.33% should be paid. A letter was submitted to the management regarding this matter.
Union Actions and Inquiry
They proceeded to the DCL office and submitted a letter addressing this issue.
I would like to inquire whether the bonus is eligible or not. If it is eligible, what are the criteria? If it is not eligible, what steps should I take? Please help me, sir.
Thanks & Regards,
A. Mahesh
From India, Hyderabad
Acknowledge(0)Amend(0)
Bonus Payment Obligations Under the Payment of Bonus Act 1965
You must be paying a bonus under the Payment of Bonus Act 1965 for the accounting year 2012-2013 (01/04/2012 to 31/03/2013), which is the 4th accounting year following the year in which production was started.
1. If your company is making/showing a profit as per the balance sheet, then you are bound to pay a minimum of 8.33% of the annual wage/salary (Basic+DA) paid to the employees.
2. If your company is in loss as per the balance sheet, then you are not bound to pay a bonus until the 5th accounting year following the year in which production was started.
3. If your company has paid a bonus earlier, then it cannot be stopped now, and you have to pay a minimum bonus of 8.33%.
4. However, if the allocable surplus (for 2012-2013) of your company exceeds the amount of the minimum bonus payable (8.33%) to the employees, then you have to pay a bonus that shall be in proportion to the salary or wage earned by the employee during the accounting year, subject to a maximum of 20% of such wage/salary.
Regards,
Kamal P
From India, Pune
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You must be paying a bonus under the Payment of Bonus Act 1965 for the accounting year 2012-2013 (01/04/2012 to 31/03/2013), which is the 4th accounting year following the year in which production was started.
1. If your company is making/showing a profit as per the balance sheet, then you are bound to pay a minimum of 8.33% of the annual wage/salary (Basic+DA) paid to the employees.
2. If your company is in loss as per the balance sheet, then you are not bound to pay a bonus until the 5th accounting year following the year in which production was started.
3. If your company has paid a bonus earlier, then it cannot be stopped now, and you have to pay a minimum bonus of 8.33%.
4. However, if the allocable surplus (for 2012-2013) of your company exceeds the amount of the minimum bonus payable (8.33%) to the employees, then you have to pay a bonus that shall be in proportion to the salary or wage earned by the employee during the accounting year, subject to a maximum of 20% of such wage/salary.
Regards,
Kamal P
From India, Pune
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The Payment Of Bonus Act, 1965 5 november 2016.pdf
Payment of Bonus Act 1965.doc