nshashi99
Dear all ,
hi,
As a contractor we have not quoted bonus in the initial quote , now the employees are demanding for bonus , which the principal employer is denying to pay stating that this is not included in your quot.
My question is weather the contractor is liable to pay bonus if the principal employer is not ready to pay or remembers ? what is the notification for the under bonus act? please suggest with notification .
Shashikant N

From India, Mumbai
samvedan
315

Hello,

I understand your predicament. The basics onthe subject are:
  1. The Bonus is a "share in the profits" of the estabishment.
  2. A "contractor" (whether a sole proprietor, or a partnership or an incorporated company is an establishment. It will be assessed for applicability of Payment of Bonus Act 1956 under that act.
  3. The "principal employer" to whom the contractor provides "contract labour" is NOT obliged under law to pay "bonus" to contractor's employees unless the contract is proved to be sham and the employer-employee relationship is decided in favour of the workmen provided by the employer.
That is the position at law. Now if you include an element of "bonus" in your quote and if it is approved by the principal employer, it will still NOT be Bonus under the act. Assuming the amount is 8.33% quoted by you and approved by the principle employer, you may feel that you are discharging obligations of paying bonus to your employees but determining bonus under the act (assuming, the act is applicable) may be a totally different amount.

As contractor you will continue to remain vulnerable under payment of Bonus Act 1965.

If you like more insights in this subject, kindly provide more details like the form of your organization, your Shops Act registration, ESI & PF code and whethr you you are compliant with Minuimum Wages Act and with these legislations and the number of workers you provide to various principal employer. This will help determine applicability of Payment of Bonus Act 1965 to your establishment and we may proceed thereafter!

Regards
samvedan
November 19, 2010
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From India, Pune
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