Dear all,
I am facing a problem regarding a bonus hike from 8.33% to 20% as demanded by the union. Please suggest a good solution to overcome this issue, as the company is stating that we won't be able to provide a 20% increase. You need to find an alternative solution for this.
Thank you.
From India, Kolkata
Acknowledge(0)
Amend(0)
I am facing a problem regarding a bonus hike from 8.33% to 20% as demanded by the union. Please suggest a good solution to overcome this issue, as the company is stating that we won't be able to provide a 20% increase. You need to find an alternative solution for this.
Thank you.
From India, Kolkata
Acknowledge(0)Amend(0)
Negotiate with the union and bring it down to 10% this time. You can start with 9%, but that will not be acceptable for the union. Then offer a 0.5% increase and also mention that this time we won't be able to give more than 9.5%, but we can consider an increase next year, provided the business prospers and profits increase.
In the third negotiation, they may bring their demand to 15%. You can offer another 0.5% increase and settle at 10%. A direct increase from 8.33% to 20% will not be entertained, even by the dispute redressal authority, i.e., the Labor Officer. Make them aware of this fact and state that if they do not accept it, we will proceed for conciliation. Let them understand that an increase from 8.33% to 20% is not feasible. If necessary, you can settle the matter at 10% or a maximum of 11%.
From India, Kannur
Acknowledge(0)Amend(0)
4473In the third negotiation, they may bring their demand to 15%. You can offer another 0.5% increase and settle at 10%. A direct increase from 8.33% to 20% will not be entertained, even by the dispute redressal authority, i.e., the Labor Officer. Make them aware of this fact and state that if they do not accept it, we will proceed for conciliation. Let them understand that an increase from 8.33% to 20% is not feasible. If necessary, you can settle the matter at 10% or a maximum of 11%.
From India, Kannur
Acknowledge(0)Amend(0)
Our learned friend Madhu has given a categorical reply on the aspect of practical bargaining by the management on statutory bonus, step by step, keeping the future in mind. At the same time, first, as a member of the management's negotiation team, you have to ensure whether the demand by the union is only a routine one without considering the legal aspects of the bonus, just to kindle the expectation of its members for the sake of popularity. Second and most importantly, as an HR person, you have to see whether the available surplus for the AY of demand is computed by the management on the basis of the principles of set on and set off as detailed under Section 15 of the Payment of Bonus Act, 1965, and then evaluate the justification behind the enhanced demand by the union. You have to remember that the maximum bonus of 20% is not an absolute condition but only the maximum limit of the range of consideration. The employer can advance an effective argument for any percentage less than 20% based on the amount set off against the previous years or the amount to be set on for the future.
From India, Salem
Acknowledge(0)Amend(0)
From India, Salem
Acknowledge(0)Amend(0)
Union has pitched the demand high to put pressure on management. Heart of hearts, they know such an increase in bonus cannot happen overnight. So negotiate calmly, and as Learned member Madhu said, make a counteroffer after considering your financial status, chances of production, profit in future years, etc., and then offer what management feels is affordable. Stick to a lower level of increase, as reducing bonus rates subsequently will give rise to heartburn and unrest.
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
All the senior members have given their suggestions to move on in the matter. As an HR professional, you should understand why there is a demand for a 20% increase against the 8.33% bonus payment from the union. You need to gauge the management's stance on how much they can afford. The information about the union's demand should be reported to the labor department. This task is not easy, but it requires full involvement and diplomacy.
Initiate discussions with the union on the welfare plans the management has for the employees and the challenges faced by the management. Keep key union members engaged and create a conducive atmosphere for negotiation. A skilled bargainer often turns out to be a successful negotiator. Do not hesitate to have multiple rounds of meetings or incur expenses; discuss matters in a friendly environment. Ensure to take minutes of each session. As suggested, keeping any increase within the range of 10-11% would be a positive step forward.
From India, Mumbai
Acknowledge(0)Amend(0)
Initiate discussions with the union on the welfare plans the management has for the employees and the challenges faced by the management. Keep key union members engaged and create a conducive atmosphere for negotiation. A skilled bargainer often turns out to be a successful negotiator. Do not hesitate to have multiple rounds of meetings or incur expenses; discuss matters in a friendly environment. Ensure to take minutes of each session. As suggested, keeping any increase within the range of 10-11% would be a positive step forward.
From India, Mumbai
Acknowledge(0)Amend(0)
Dear All,
The Payment of Bonus Act is absolutely clear on determining the percentage of bonus based on available surplus, allocable surplus, set on, and set off. If the organization has paid 8.33% in accordance with the Payment of Bonus Act, there should not be any problem even if it is challenged in a court of law. However, if it is not compliant, then it becomes an issue.
Union demands are a separate matter. If the calculations align with the Payment of Bonus Act, please share the details with the union and negotiate if necessary. My suggestion is that if the Act restricts the bonus payment to no more than 8.33%, any excess amount should be paid as ex gratia instead of bonus. Failure to adhere to the Act's guidelines may result in the continuous payment being considered a customary bonus in the future.
Thanks & Regards,
S K Bandyopadhyay (WB, Howrah)
+91 98310 81531
skb@usdhrs.in
From India, New Delhi
Acknowledge(0)Amend(0)
The Payment of Bonus Act is absolutely clear on determining the percentage of bonus based on available surplus, allocable surplus, set on, and set off. If the organization has paid 8.33% in accordance with the Payment of Bonus Act, there should not be any problem even if it is challenged in a court of law. However, if it is not compliant, then it becomes an issue.
Union demands are a separate matter. If the calculations align with the Payment of Bonus Act, please share the details with the union and negotiate if necessary. My suggestion is that if the Act restricts the bonus payment to no more than 8.33%, any excess amount should be paid as ex gratia instead of bonus. Failure to adhere to the Act's guidelines may result in the continuous payment being considered a customary bonus in the future.
Thanks & Regards,
S K Bandyopadhyay (WB, Howrah)
+91 98310 81531
skb@usdhrs.in
From India, New Delhi
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.