Payment of Bonus Act, 1965

Payment of Bonus Act, 1965 25th Sept 1965 Applicability! (a) Every factory (b) Every establishment 20 or more employees. (C) Establishment (not less than 10 notified by Appropriate Government upto 19) Non applicability! (a) Section 32 (b) Section 20 (4) section 36 Section 32 1. Banking * RBI IDBI * SIBBI IFCI + SFC * NABARD * Agricultural refinance. Corporation Notified Public Financial Instiutton. * 2. Insurance Employees of UC 3. Non profit organisation * Employees of Indian Red cross society * Hospitals | Educational institutions. * Social welfare organisations 4. Govt. organisation CONNOL of culsa 5. Ocean transport * Seamen * Dock Wonders * E'een of inland water mansport establishment Section 20 Public sector corablishments Public Sector establishment → any establishment owned or controlled by a Govt. co. less than 40% of shares held by Gout/ eB1/ Corporation owned by Gout or RB1. Act does nor apply to public sector establishment POBA becomes applicable to a public sector if Competing Production and Save of goods or supply of service Pv (le for supply of s goods or service the Public Sector is in Competition with Private sector) AND Income- such comparing businen 20% of total income of the public sector establishment Section 36 Notified establishment Au notifies in the on exempting an establichment.. Before notifying As we consider (a) Financial circumstances (b) other circumstances (C) Public interest Types of bonus 1. profit bared bonus 2. productvity Unked bonus. Pays Employes bonus to eligible employees Employee: Section 2/13) Any person employed 1 on hhe or reward to do Skilled unskilled Manuall supervisory Technical vencal Manageriall Administrative not exceed 21,000 per month. an apprentice and salary does But does include The following are also regardes as employees. 1. Temporary employee 2. Part time employee 3. piece rated employee 4. Seasoned establishment employee 5. Probationes 6. Retrenched employee 7. Dismissed exployee taken we back wages ONGC v. Sham Kumar Sahagal 8. Employee employed through contractors. Operations. on buildup Eligible employee: (Section 8) worked for 30 days i an Cervan days Afciup year are deemed presence and shall be counted in 30 days (a) Maternity leave (b) lay off (C) Leave wuh wages (d) temporary disablement caused an accident arising during the a result of of employment. Not eligible to get bonus: (Section) When Q employee is dismissed from employment due to (a) fraud (b) riotous violent behavious Premises of employer within the (C) Theft, misappropriation or sabotage to ary property of employer. Reduction against bonus (section 18) employee is guilty of misconduct resulting in ferencial loss to the employer Aud Lose can be adjusted the bonus of such accounting year. Available surplus: Profer of employer as per POBA Allocable Surpws: (Section 2(4) Profe to be shared coin eee bonus. ⇒ co which has declared dividend 60% of available Surplus Other cases 67% of available surplus Available suspws (section() Gross profie as per Sch (+) Jax savups on ok of bonus of ty. (-) Duect taxes (*) Depreciation an per IT Act () Preference dividend (-) 8.5% of opening equity capital 6% of opening reserves Minimum bonus: (Section 10) 8.33% of Salary / wape 2 100 higher In case 아 eees below the age of 8.83% of salary Lwaye 15 260 higher. Maximum bonus: (Section 11) 20% of salary! wape... Payment of bonUS If the company has no allo cable surplus or the allocable surpur is Nust pay MINIMUM bonus. Wadequale - If the allo cable surplus exceeds minimum bonus but it is lem than maximum bonus enthe avocable surples in proportion to 96 Salary wate alocable suspws exceeds Max bonus - Pay Maximum bonus. the Salary: (Section 2 (21) Any remuneration paid / Payable upon fulfilmas of terms of employment which are measurechle in Monetary terme but excludes allowance, bonus, commission ete Salary Basic + DA vawe of food food concession if given in lieu of Salary. Set on and Set off: (section 15) allocable surplus Maximune bonus the extrafexcen Shall be carried but subject 10 forward to the next 4 years limit of maximum bonus. This is Set on If there is no allocable surplus allocable surplus < Minimum bonus the May be carried forward 4 Muy years. 10 Ho the deficit Aext Bonus of the current year shall se fust paid from profits of that year and ther if there is a deficit that Previous year. للعام be from the set on of Newly set up establishmentő: (Section 16) First five years immediately succeeding the fy in which the establishment i netop Starts selling go ode ade or the provide services bonus shall be paid only for years they earn profi Profe is that profer which is derived after providing for depreciation of previous year and current year and adiuining Loss of previous year. 2 From 6th Whether سل year the company profie ar not. han pay dinderd Salary for the purpose of computation of bonus: (Section 12) If an employee bonus shau Salary of 7000 a Salary of more than celulated لا 7000 earniy غط Proportionale Reducker in quantum of bonus: (sectionis) employee has OL worked for all working days in an acounting year his bonus shau be proportionately 96 reduced. Deduction of interim bonus from bonus 17) payable: (section If the employer he can payable has paid any customary or interim bonus deduct the amount so paid prom the under this ACL even applies for advance bonш lie the bonus employee. This paid by employee. a part of bonus payable under A) Time Limit for payment of bonus: (Section 19) Bonus musl Py. be paid within & mths from the end of Employer may apply for and May extend the exten Scon of time to 2 years. 2 →For disputes the Month prom bonus Shau daje on be paid within I which award is enforceable. the Recovery of Bonus: (section 21) eee (Who is no longer is employments or person authorised by him apply within this year from Which the the date on money is, payable 14 AG satisfied that amount due issue certificate to COLLECTOR recover from ear Presumption about Ble and profit and Loss Ale (section 23) In case of books of Afcs of a compary a If they one audited by CLAG auditor it is presumed that they corporation or a qualified are accurate. However the made union can request a clarification with respect to ary item is the Bls or P/L AIC. Audit of Ates of establishment which G company or corporation: (Section 25) If the books of Mes ane audited by qualified auditor the same presumphon an fer a company wi apply. If the books of Ales one nor audited and if the authority thinks & necessary i& get the boobs audied. may ast the employer to Inspectors: (section 27) The appropriate Government may appoint an mary inspector an & deems for by norifying in the official Gazette Powers: I requine exployer to furnish information 2. enter any establishment or previces at reasonable nove and get from the person inchoupe account book, register and other documents for examination 3 examine with respect to agent on pervant or any any matter the employer, his other person who he thinks is employee of the establishment 4. Make copies or take extracts from any book, register or omer dowment 5. Such powers as specified Production Linked bonus: (Section 31A) The employer and employee may apree on of bonus on payment the basis of production. Such an creemet is valid. However if the apreement 1. relinquishes the light to minimum bonus to the employees; or 2. bonus payable exmployee exceeds MAXIMUM bonus. puch an agreement is vold to that extent Accounting year: (section 2(1) En relation to corporation the day on of Ales are closed. whid the bouks in relation to company- is laid down the the period for which the PIL AGM. ary Other case- of Aprel the year commenciy on 1st day (6) if closed and balanced on ary 31st Mar ther the balanced. day Other day Other th on which the books and This option(b) once exercised cannot be excicised apair wuhour i wiki. the previous permission of prescribed authority Appropriate Government: (Section 2(5) establishment for which under the Industrial Disputes Act, 1947 AG is ca Ca Other case sa Award: (Section 207) Interin or fues determination → of any industrial dispute or as relating thereto by any labour court, Indusmal Tribund or Nationd Tribunal constituted under indusmal Disputes Act, 1947 or any Other authority constituted under any corresponding law, relating to investigation and settlement of indusmal disputes in force in the and includes stoje an arbitration award made under section 10A of that Act or under that law.