Hi I would like to know the details just like a short note for \" Bonus Linked with production/ productivity\"
From India, Pune
From India, Pune
The bonus is being paid based on the profit made by a company. One of the two defenitions of bonus is 'Profit Share'. The second one is 'Deferred Wages'.
But even if some of the companies achieve their target, they will be unable to make optimum profit due to the conditions beyond their control viz. fall of prices, depreciation etc. At this juncture an agreement may be signed between the Management and Unions as per Section 31A of the bonus act introduced/amended in 1976, which is called the production/productivity linked bonus. Under this clause the profit will not be taken care of. Instead the quantum of production, manpower, the installed capacity of the company etc. will be accounted.
Section 31A in The Payment Of Bonus Act, 1965
31A. 2[ Special provision with respect to payment of bonus linked with production or productivity.- Notwithstanding anything contained in this Act,--
(i) where an agreement or a settlement has been entered into by the employees with their employer before the commencement of the Payment of Bonus (Amendment) Act, 1976 (23 of 1976 ), or
1. Ins. by Act 66 of 1980, s. 16 (w. e. f. 21- 8- 1980 ). 2. Ins. by Act 23 of 1976, s. 19 (w. e. f. 25- 9- 1975 ).
(ii) where the employees enter into any agreement or settlement with their employer after such commencement, for payment of an annual bonus linked with production or productivity in lieu of bonus based on profits payable under this Act, then, such employees shall be entitled to receive bonus due to them under such agreement or settlement, as the case may be: 1[ Provided that any such agreement or settlement whereby the employees relinquish their right to receive the minimum bonus under section 10 shall be null and void in so far as it purports to deprive them of such right:] 2[ Provided further that] such employees shall not be entitled to be paid such bonus in excess of twenty per cent. of the salary or wage earned by them during the relevant accounting year.]
Abbas.P.S
From India, Bangalore
517But even if some of the companies achieve their target, they will be unable to make optimum profit due to the conditions beyond their control viz. fall of prices, depreciation etc. At this juncture an agreement may be signed between the Management and Unions as per Section 31A of the bonus act introduced/amended in 1976, which is called the production/productivity linked bonus. Under this clause the profit will not be taken care of. Instead the quantum of production, manpower, the installed capacity of the company etc. will be accounted.
Section 31A in The Payment Of Bonus Act, 1965
31A. 2[ Special provision with respect to payment of bonus linked with production or productivity.- Notwithstanding anything contained in this Act,--
(i) where an agreement or a settlement has been entered into by the employees with their employer before the commencement of the Payment of Bonus (Amendment) Act, 1976 (23 of 1976 ), or
1. Ins. by Act 66 of 1980, s. 16 (w. e. f. 21- 8- 1980 ). 2. Ins. by Act 23 of 1976, s. 19 (w. e. f. 25- 9- 1975 ).
(ii) where the employees enter into any agreement or settlement with their employer after such commencement, for payment of an annual bonus linked with production or productivity in lieu of bonus based on profits payable under this Act, then, such employees shall be entitled to receive bonus due to them under such agreement or settlement, as the case may be: 1[ Provided that any such agreement or settlement whereby the employees relinquish their right to receive the minimum bonus under section 10 shall be null and void in so far as it purports to deprive them of such right:] 2[ Provided further that] such employees shall not be entitled to be paid such bonus in excess of twenty per cent. of the salary or wage earned by them during the relevant accounting year.]
Abbas.P.S
From India, Bangalore
Dear Abbas
This is a nice update.
I want to know while entering into an agreement for productivity linked bonus under sec.31-A of Bonus Act, whether the employer is also bound to pay the minimum bonus under Sec.10 of the Act.
B.Saikumar
From India, Mumbai
This is a nice update.
I want to know while entering into an agreement for productivity linked bonus under sec.31-A of Bonus Act, whether the employer is also bound to pay the minimum bonus under Sec.10 of the Act.
B.Saikumar
From India, Mumbai
Dear Saikumar,
Yes, the employer is bound to pay the minimum bonus under Sec.10 of the Bonus Act. I shall reproduce the provision already quoted above as "..........the employees relinquish their right to receive the minimum bonus under section 10 shall be null and void..........."
Abbas.P.S
From India, Bangalore
Yes, the employer is bound to pay the minimum bonus under Sec.10 of the Bonus Act. I shall reproduce the provision already quoted above as "..........the employees relinquish their right to receive the minimum bonus under section 10 shall be null and void..........."
Abbas.P.S
From India, Bangalore
Dear Abbas
I also hold the same opinion but some have differed with me saying that the employer need not pay the minimum bonus once productivity linked bonus is paid.Now iam satis fied that I have correctly interpreted Sec.31-A.Thanks for clarifying.
B.Saikumar
HR& Labour Law Advisor
Mumbai
From India, Mumbai
I also hold the same opinion but some have differed with me saying that the employer need not pay the minimum bonus once productivity linked bonus is paid.Now iam satis fied that I have correctly interpreted Sec.31-A.Thanks for clarifying.
B.Saikumar
HR& Labour Law Advisor
Mumbai
From India, Mumbai
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