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Kaushambi
2

Dear Friends,
Presently in our org. we are incorporating Bonus in Full & Final settlement on pro-rata basisfor the respective employee.
1. Is it correct practice?
2. Wil there be any issue if we stop considering Bonus in F&F as Bonus is an annual benefit.
Kindly give me the right info.

From India, Pune
v.harikrishnan
169

If the employees for whom F and F is made are covered by the provisions of the Payment of Bonus Act and are qualified to get the bonus under the Payment of Bonus Act you can incorporate pro rata bonus in full and final settlement. The only issue is if the percentage of bonus paid at the time of F and F is less than the bonus paid at the end of the financial year then the employee for whom F and F had been made can claim the difference.
If you stop considering bonus in F and F the employee can claim bonus after bonus is paid to the employees on roll.
In the case of employees who are not covered by the Payment of Bonus Act, the company has to take a policy decision as to whether bonus should be incorporated in F and F
Regards

From India, Madras
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