Dear All,
I am working in a IT-Hardware servicing organisation. In my organisation, while calculating bonus they are considering the Basic + HRA. If the salary limit(Basic +HRA) of a staff is more than Rs.10000/- then the staff is not eligible for Bonus. I have spoken to my Finance Manager, but he is disagreeing stating that it was not mentioned anywhere in Bonus Act that the HRA shouldn't taken into account. they have convinced the Auditor also by quoting this.
Is there any case laws in terms of the above issue. Seniors please help.
Regards
M.Ganesh.
From India, Madras
I am working in a IT-Hardware servicing organisation. In my organisation, while calculating bonus they are considering the Basic + HRA. If the salary limit(Basic +HRA) of a staff is more than Rs.10000/- then the staff is not eligible for Bonus. I have spoken to my Finance Manager, but he is disagreeing stating that it was not mentioned anywhere in Bonus Act that the HRA shouldn't taken into account. they have convinced the Auditor also by quoting this.
Is there any case laws in terms of the above issue. Seniors please help.
Regards
M.Ganesh.
From India, Madras
Dear Sir, Bonus cal.on Basic + D.A. = bous cal amount than 10,000/- more salary can not liable bonus. Paresh M. vyas
From India, Mumbai
3From India, Mumbai
Dear M.Ganesh,
As others have also mentioned HRA is not to be included in the wages head for calculation of bonus. Plz go through the definition of wage under section 2(21) of Bonus Act,1965 & put before the Mgt. If they are including HRA then why other allowances are not included ? You have requested for any case law for exclusion of HRA, so, you may note this judgement of Hon'ble HC of Bombay for your ready reference.
Scindia Steam Navigatio Co. Ltd. v. Scindia Employees Union, 1983 Lab IC 759 (Bom HC) (DB).
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
As others have also mentioned HRA is not to be included in the wages head for calculation of bonus. Plz go through the definition of wage under section 2(21) of Bonus Act,1965 & put before the Mgt. If they are including HRA then why other allowances are not included ? You have requested for any case law for exclusion of HRA, so, you may note this judgement of Hon'ble HC of Bombay for your ready reference.
Scindia Steam Navigatio Co. Ltd. v. Scindia Employees Union, 1983 Lab IC 759 (Bom HC) (DB).
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
Dear Ganesh,
As per the amendments of Indian Bonus Act 1965, we need to read this.
Employees drawing salary or basic wages (+DA) upto Rs 3,500 per month are entitled to bonus, if he has worked for at least 30 working days in an accounting year. Even a worker working in seasonal factory is eligible if he has worked for at least 30 working days. Apprentices are not eligible for bonus.
Salary above Rs. 2,500 is not considered for calculation of Bonus. [section 12]. Employee drawing salary/wage exceeding Rs 3,500 is not entitled to any bonus under the Act.
Thus, minimum bonus @ 8.33% will be Rs 2,500 and maximum @ 20% will be Rs 6,000 for the year, when salary of employee exceeds Rs 2,500 but is less than Rs 3,500.
Eligibility for bonus if worked for minimum 30 day - Every employee shall be entitled to be paid be his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year. [section 8]
So it is the duty of your Finance Head to calculate the profit and accordingly set on and set off funds after profit caclulation. HR department has no right to look and probe into the acount books of the company. In fact, HR cannot dictate or advise on bonus allocation. It is the job of finance people.
So even if your finance man has taken Basic+ HRA, don't make an issue. It is his headache to answer the management. For the sake of document advice proof, forward them a mail about this and forget. Hope your query has been answered.
Regards,
Chandru
From India, Madras
As per the amendments of Indian Bonus Act 1965, we need to read this.
Employees drawing salary or basic wages (+DA) upto Rs 3,500 per month are entitled to bonus, if he has worked for at least 30 working days in an accounting year. Even a worker working in seasonal factory is eligible if he has worked for at least 30 working days. Apprentices are not eligible for bonus.
Salary above Rs. 2,500 is not considered for calculation of Bonus. [section 12]. Employee drawing salary/wage exceeding Rs 3,500 is not entitled to any bonus under the Act.
Thus, minimum bonus @ 8.33% will be Rs 2,500 and maximum @ 20% will be Rs 6,000 for the year, when salary of employee exceeds Rs 2,500 but is less than Rs 3,500.
Eligibility for bonus if worked for minimum 30 day - Every employee shall be entitled to be paid be his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year. [section 8]
So it is the duty of your Finance Head to calculate the profit and accordingly set on and set off funds after profit caclulation. HR department has no right to look and probe into the acount books of the company. In fact, HR cannot dictate or advise on bonus allocation. It is the job of finance people.
So even if your finance man has taken Basic+ HRA, don't make an issue. It is his headache to answer the management. For the sake of document advice proof, forward them a mail about this and forget. Hope your query has been answered.
Regards,
Chandru
From India, Madras
Dear M.Ganesh.
I do not have the judgement with me. Plz contact any advocate who is having books on Labour & Industrial Cases. By the way on which site you are looking for having details for such type of cases.
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
I do not have the judgement with me. Plz contact any advocate who is having books on Labour & Industrial Cases. By the way on which site you are looking for having details for such type of cases.
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
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