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Unit 9: Payment of Bonus Act, 1965

l z All amounts payable to an employee by way of bonus under this Act shall be paid in cash Notes
by his employer within a month from the date on which the award become enforceable or
the settlement comes into operation, in respect of any dispute regarding payment of bonus.
But, in any other case, it shall be paid within a period of eight months from the close of the
accounting year.

l z However, the Government may order, upon receiving application made to it by the
employer and for sufficient reasons, to extend the said period of eight months to such
further period or periods as it thinks fit, such that the total period so extended shall not, in
any case, exceed two years.
l z An employee shall be disqualified from receiving bonus if he/she is dismissed from service
for:- (i) fraud; or (ii) riotous or violent behaviour while on the premises of the establishment;
or (iii) theft, misappropriation or sabotage of any property of the establishment.

Notes Applicability of Act (Sec. 1)

Every factory wherein 10 or more persons are employed with the aid of power or an
establishment in which 20 or more persons are employed without the aid of power on any
day during an accounting year.

9.1.4 Duties and Rights of Employer

Duties of Employer are as follows:

l z To calculate and pay the annual bonus as required under the Act.
l z To submit an annual return of bonus paid to employees during the year to the Inspector,
within 30 days of the expiry of the time limit specified for payment of bonus.
l z To co-operate with the Inspector, produce before him the registers/records maintained,
and such other information as may be required by them.

l z To get his account audited as per the directions of a Labour Court/Tribunal or of any such
other authority.
An employer has the following rights:

l z Right to forfeit bonus of an employee, who has been dismissed from service for fraud,
riotous or violent behaviour, or theft, misappropriation or sabotage of any property of the
establishment.
l z Right to make permissible deductions from the bonus payable to an employee, such as,
festival/interim bonus paid and financial loss caused by misconduct of the employee.

l z Right to refer any disputes relating to application or interpretation of any provision of the
Act, to the Labour Court or Labour Tribunal.

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Caselet Ghewar Chand

he principle that a ruling of a superior court is binding law is not of scriptural
sanctity but is of ratio-wise luminosity within the edifice of facts where the judicial
Tlamp plays the legal flame. So there is no impediment in reading Ghewar Chand’s
Contd...

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