A charitable Trust runs a Hospital, Counselling Centre, CSR Arms for group companies and also a Community College for the benefits of students in rural areas. In these, hospital alone has a business dealings and other divisions are managed by the Donations receivables. Now my query is, whether the employees working in all the divisions under the roof of a Trust, are come under the purview of Payment of Bonus Act. Are the Management liable to pay bonus. Request seniors views please.
From India, Mumbai
25From India, Mumbai
Please refer Section 32 in The Payment of Bonus Act, 1965
32 Act not to apply to certain classes of employees. —Nothing in this Act shall apply to—
(i) 40 [***] employees employed by the Life Insurance Corporation of India;
(ii) seamen as defined in clause (42) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958);
(iii) employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948), and employed by registered or listed employers;
(iv) employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority;
(v) employees employed by—
(a) the Indian Red Cross Society or any other institution of a like nature (including its branches); (b) universities and other educational institutions;
(c) institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purposes of profit;
41 [***] 42 [***]
(viii) employees employed by the Reserve Bank of India;
(ix) employees employed by—
(a) the Industrial Finance Corporation of India;
(b) any Financial Corporation established under section 3, or any Joint Financial Corporation established under section 3A, of the State Financial Corporations Act, 1951 (63 of 1951);
(c) the Deposit Insurance Corporation;
43 [(d) the National Bank for Agriculture and Rural Development;]
(e) the Unit Trust of India;
(f) the Industrial Development Bank of India;
44 [(fa) the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989;]
45 [(ff) the National Housing Bank;]
(g) any other financial institution 46 [(other than a banking company)], being an establishment in public sector, which the Central Government may, by notification in the Official Gazette, specify, having regard to— 47 [***]
(xi) employees employed by inland water transport establishments operating on routes passing through any other country. COMMENTS
(i) its capital structure;
(ii) its objectives and the nature of its activities;
(iii) the nature and extent of financial assistance or any concession given to it by the Government; and
(iv) any other relevant factor;
(i) Appellant–Medical College and hospital was held to be neither an educational institution coming under section 32(v)(b) of the Payment of Bonus Act, 1965 nor a hospital which was run on a non-profit basis; Christian Medical College and Hospital v. Presiding Officer, Industrial Tribunal, Madras, 2003 (III) LLJ 650 (Mad).
(ii) Tamil Nadu Water Supply and Drainage Board is an institution established for the purposes of profit. It is, therefore, not excluded from the preview of section 32 (v) (c) of the Act; Tamil Nadu Water Supply and Drainage Board v. Tamil Nadu Water Supply and Drainage Board Engineers' Association, 1998 LLR 417.
(iii) Haryana Housing Board cannot be treated to be a local authority within the meaning of section 32 (iv) of the Act; Housing Board of Haryana v. Haryana Housing Board Employees' Union, AIR 1996 SC 434.
(iv) Institutions designed for earning profit should pay the minimum bonus to their employees; T.N. Water Supply & Drainage Board Engineers' Association v. Government of Tamil Nadu, (1991) 2 LLJ 394 (Mad).
(v) This Act is not applicable to agents of State Governments; Maharashtra State Co-op. Marketing Federation Ltd. v. 1st Labour Court, (1988) 57 FLR 301 (Bom).
(vi) Local bodies do not come within the purview of this Act; Union of India v. R.C. Jain, AIR 1981 SC 951.
(vii) Institutions such as hospitals, social welfare institutions and chambers of commerce are intended to be exempted under section 32 (v) (c); Maharashtra Electricity Board v. M.C. Chitale, (1981) 1 LLJ 162 (Bom) (DB).
Also please find enclosed herewith the Notes/Journal which will clear the query posted by you
From India, Ahmadabad
32 Act not to apply to certain classes of employees. —Nothing in this Act shall apply to—
(i) 40 [***] employees employed by the Life Insurance Corporation of India;
(ii) seamen as defined in clause (42) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958);
(iii) employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948), and employed by registered or listed employers;
(iv) employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority;
(v) employees employed by—
(a) the Indian Red Cross Society or any other institution of a like nature (including its branches); (b) universities and other educational institutions;
(c) institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purposes of profit;
41 [***] 42 [***]
(viii) employees employed by the Reserve Bank of India;
(ix) employees employed by—
(a) the Industrial Finance Corporation of India;
(b) any Financial Corporation established under section 3, or any Joint Financial Corporation established under section 3A, of the State Financial Corporations Act, 1951 (63 of 1951);
(c) the Deposit Insurance Corporation;
43 [(d) the National Bank for Agriculture and Rural Development;]
(e) the Unit Trust of India;
(f) the Industrial Development Bank of India;
44 [(fa) the Small Industries Development Bank of India established under section 3 of the Small Industries Development Bank of India Act, 1989;]
45 [(ff) the National Housing Bank;]
(g) any other financial institution 46 [(other than a banking company)], being an establishment in public sector, which the Central Government may, by notification in the Official Gazette, specify, having regard to— 47 [***]
(xi) employees employed by inland water transport establishments operating on routes passing through any other country. COMMENTS
(i) its capital structure;
(ii) its objectives and the nature of its activities;
(iii) the nature and extent of financial assistance or any concession given to it by the Government; and
(iv) any other relevant factor;
(i) Appellant–Medical College and hospital was held to be neither an educational institution coming under section 32(v)(b) of the Payment of Bonus Act, 1965 nor a hospital which was run on a non-profit basis; Christian Medical College and Hospital v. Presiding Officer, Industrial Tribunal, Madras, 2003 (III) LLJ 650 (Mad).
(ii) Tamil Nadu Water Supply and Drainage Board is an institution established for the purposes of profit. It is, therefore, not excluded from the preview of section 32 (v) (c) of the Act; Tamil Nadu Water Supply and Drainage Board v. Tamil Nadu Water Supply and Drainage Board Engineers' Association, 1998 LLR 417.
(iii) Haryana Housing Board cannot be treated to be a local authority within the meaning of section 32 (iv) of the Act; Housing Board of Haryana v. Haryana Housing Board Employees' Union, AIR 1996 SC 434.
(iv) Institutions designed for earning profit should pay the minimum bonus to their employees; T.N. Water Supply & Drainage Board Engineers' Association v. Government of Tamil Nadu, (1991) 2 LLJ 394 (Mad).
(v) This Act is not applicable to agents of State Governments; Maharashtra State Co-op. Marketing Federation Ltd. v. 1st Labour Court, (1988) 57 FLR 301 (Bom).
(vi) Local bodies do not come within the purview of this Act; Union of India v. R.C. Jain, AIR 1981 SC 951.
(vii) Institutions such as hospitals, social welfare institutions and chambers of commerce are intended to be exempted under section 32 (v) (c); Maharashtra Electricity Board v. M.C. Chitale, (1981) 1 LLJ 162 (Bom) (DB).
Also please find enclosed herewith the Notes/Journal which will clear the query posted by you
From India, Ahmadabad
The Hospitals providing Service on chargeable basis/Providing Commercial Service for Consideration comes under the purview of the Payment of of bonus act, 1965
Hospitals providing "Free Service" are exempted.based on the information furnished, it is difficult to conclude about applicability of the Act.It is better to decide based on Balance Sheet/profit & Loss Statement.
From India, New Delhi
Hospitals providing "Free Service" are exempted.based on the information furnished, it is difficult to conclude about applicability of the Act.It is better to decide based on Balance Sheet/profit & Loss Statement.
From India, New Delhi
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Bigger bonuses for more as Lok Sabha amends Payment of Bonus Act - The Economic Times.pdf
THE PAYMENT OF BONUS ACT.doc