One existing industry so far has followed their own procedure for payment of Bonus. It is not as per Payment of of Bonus act. No Bonus act ceilings for eligibility criteria as well calculation of Bonus followed as provided in the act. All employees worked for minimum of 30 days in a year will receive bonus irrespective of their salary without any ceiling. Every year based on the profit of the company, management will declare bonus and ex-gratia which will range from 10% to 30% on the total annual wages of Basic, DA and Special pay. Thus all employees used to receive Bonus and ex-gratia amount of Rs 40000/- to Rs. 100000/- every year.
My question is whether the management can switch over to follow procedure as per the Payment of Bonus Act from the current financial year. Whether unions take up the matter for legal fight as well as agitations.

From India, New Delhi

Unions will take it up as their right, no doubt. Therefore, you have to convince the Union first why you want to switch it over to Payment of Bonus Act. Having paid bonus without wage ceiling and without any restriction on the percentage of bonus it has become a part of the Service Conditions and when you change it, you should give notice u/s 9A of the Industrial Disputes Act. You may have to compensate the loss of bonus by way of some other allowance. It will take time for a settlement also. To start with, you may call a meeting with the Union leaders.
From India, Kannur

Dear Mr Balasundaram-HR ,
It is obvious on part of union to raise an objection on certain changes are going to effect their earnings. Because as per the act range is between 8.33% to 20℅ and you were paying 10℅to 30℅ which is much more than the changes likely to happen, the result of which employees would get comparatively less.
The employees and union would definitely welcome the change provided having a solid ground. I do not see any feasible ground for such changes. You need to discuss with the statutory authority under the act and involve them for arranging negotiations. The management need to discuss the issue on first hand with non-eligible employees who are going to affected more or largely, if the changes occur. Those employees need to be taken into confidence by signing an agreement. Then management push the idea with key members of the Union to understand the pulse.

From India, Mumbai

Please make one calculation for all your existing employees as per PB Act considering Minimum Wages for different categories - Skill, Highly Skill, Semi skill and Un skill.( hope your all employees basic & DA is more than 7000/- per month ). % of bonus should be as per PB Act considering Available surplus, allocable surplus, Set on and Set off.

Now calculate as per your proposal at 10% level which is minimum as per your scheme
and then compare between two and even at 10% level of your scheme it is better - show it to Union and hopefully they will agree. Obviously more than 10% will be better up to limit of 30%.

As per law every employer can pay better amount of bonus than statutory provisions. But in future if the company's policy continue, it will be considered as customary bonus and organization has to pay the same irrespective of profit and loss.

Better pay bonus as per PB Act and any excess can be paid as ex-gratia with conditions.

S K Bandyopadhyay ( WB, HAOWRAH)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
Thank you Mr Madhu T K, Mr Prabhat and Mr S K Bandyopadhyay for your valuable and very much appreciable suggestion on the above issue. It will be highly useful to come out with proper solution on the matter by the management.

Thank you all once again.

T S Balasundaram

From India, New Delhi
We greatly appreciate the insightful and helpful feedback provided by Mr. Madhu T K, Mr. Prabhat, and Mr. S K geometry dash Bandyopadhyay about the matter at hand. It would be really appreciated if the management could resolve this issue appropriately.
From United States, Ashburn
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