One existing industry has followed its own procedure for the payment of the Bonus. It is not as per the Payment of Bonus Act. There are no ceilings for eligibility criteria in the Bonus act, as well as the calculation of Bonus, which is followed as provided in the act. All employees who have worked for a minimum of 30 days in a year will receive a bonus regardless of their salary, without any ceiling. Every year, based on the profit of the company, the management will declare a bonus and ex-gratia, ranging from 10% to 30% of the total annual wages of Basic, DA, and Special pay. Thus, all employees used to receive a Bonus and ex-gratia amount ranging from Rs. 40,000 to Rs. 100,000 every year.
My question is whether the management can switch to following the procedure as per the Payment of Bonus Act from the current financial year. Will the unions take up the matter for a legal fight as well as agitations?
From India, New Delhi
Acknowledge(0)
Amend(0)
My question is whether the management can switch to following the procedure as per the Payment of Bonus Act from the current financial year. Will the unions take up the matter for a legal fight as well as agitations?
From India, New Delhi
Acknowledge(0)Amend(0)
Unions will take it up as their right, no doubt. Therefore, you have to convince the Union first why you want to switch it over to the Payment of Bonus Act. Having paid bonus without a wage ceiling and without any restriction on the percentage of bonus, it has become a part of the Service Conditions. When you change it, you should give notice under Section 9A of the Industrial Disputes Act. You may have to compensate for the loss of bonus by way of some other allowance. It will take time for a settlement as well. To start with, you may call a meeting with the Union leaders.
From India, Kannur
Acknowledge(0)Amend(0)
4771From India, Kannur
Acknowledge(0)Amend(0)
Dear Mr. Balasundaram-HR,
It is obvious on the part of the union to raise an objection to certain changes that are going to affect their earnings. This is because as per the act, the range is between 8.33% to 20°C, and you were paying 10°C to 30°C, which is much more than the changes likely to happen. As a result, employees would get comparatively less.
The employees and the union would definitely welcome the change provided there is a solid ground. I do not see any feasible ground for such changes. You need to discuss with the statutory authority under the act and involve them in arranging negotiations. The management needs to discuss the issue firsthand with non-eligible employees who are going to be affected more or largely if the changes occur. These employees need to be taken into confidence by signing an agreement. Then, the management can push the idea with key members of the union to understand the pulse.
From India, Mumbai
Acknowledge(0)Amend(0)
It is obvious on the part of the union to raise an objection to certain changes that are going to affect their earnings. This is because as per the act, the range is between 8.33% to 20°C, and you were paying 10°C to 30°C, which is much more than the changes likely to happen. As a result, employees would get comparatively less.
The employees and the union would definitely welcome the change provided there is a solid ground. I do not see any feasible ground for such changes. You need to discuss with the statutory authority under the act and involve them in arranging negotiations. The management needs to discuss the issue firsthand with non-eligible employees who are going to be affected more or largely if the changes occur. These employees need to be taken into confidence by signing an agreement. Then, the management can push the idea with key members of the union to understand the pulse.
From India, Mumbai
Acknowledge(0)Amend(0)
Please make one calculation for all your existing employees as per the Payment of Bonus (PB) Act considering Minimum Wages for different categories - Skilled, Highly Skilled, Semi-skilled, and Unskilled. (I hope all your employees' basic pay & DA is more than 7000/- per month). The percentage of bonus should be as per the PB Act considering Available surplus, allocable surplus, Set on, and Set off.
Now calculate as per your proposal at a 10% level, which is the minimum as per your scheme, and then compare between the two. Even at a 10% level of your scheme, it is better - show it to the Union, and hopefully, they will agree. Obviously, more than 10% will be better, up to the limit of 30%.
As per the law, every employer can pay a better amount of bonus than statutory provisions. But if the company's policy continues in the future, it will be considered as customary bonus, and the organization has to pay the same irrespective of profit and loss.
It is better to pay bonus as per the PB Act, and any excess can be paid as ex-gratia with conditions.
S K Bandyopadhyay (WB, HOWRAH) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in USD HR Solutions – To strive towards excellence with effort and integrity
From India, New Delhi
Acknowledge(0)Amend(0)
Now calculate as per your proposal at a 10% level, which is the minimum as per your scheme, and then compare between the two. Even at a 10% level of your scheme, it is better - show it to the Union, and hopefully, they will agree. Obviously, more than 10% will be better, up to the limit of 30%.
As per the law, every employer can pay a better amount of bonus than statutory provisions. But if the company's policy continues in the future, it will be considered as customary bonus, and the organization has to pay the same irrespective of profit and loss.
It is better to pay bonus as per the PB Act, and any excess can be paid as ex-gratia with conditions.
S K Bandyopadhyay (WB, HOWRAH) CEO-USD HR Solutions +91 98310 81531 skb@usdhrs.in USD HR Solutions – To strive towards excellence with effort and integrity
From India, New Delhi
Acknowledge(0)Amend(0)
Thank you, Mr. Madhu T K, Mr. Prabhat, and Mr. S K Bandyopadhyay, for your valuable and much appreciated suggestions on the above issue. It will be highly useful to come up with a proper solution on the matter by the management.
Thank you all once again.
T S Balasundaram
From India, New Delhi
Acknowledge(0)Amend(0)
Thank you all once again.
T S Balasundaram
From India, New Delhi
Acknowledge(0)Amend(0)
We greatly appreciate the insightful and helpful feedback provided by Mr. Madhu T K, Mr. Prabhat, and Mr. S K Bandyopadhyay about the matter at hand. It would be really appreciated if the management could resolve this issue appropriately.
Geometry Dash: geometry dash
From United States, Ashburn
Acknowledge(0)Amend(0)
Geometry Dash: geometry dash
From United States, Ashburn
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.
Amendment to Payment of Bonus Act 2015.jpg
Bigger bonuses for more as Lok Sabha amends Payment of Bonus Act - The Economic Times.pdf
THE PAYMENT OF BONUS ACT.doc