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Labour Laws
Notes support the only conclusion that the core of the cause of action is custom and/or term of
service, not sounding in or conditioned by profits. The omission to mention the name of
a festival as a matter of pleading did not detract from the claim of customary bonus. An
examination of the totality of materials leads to the inevitable result that what had been
claimed by the workmen was bonus based on custom and service condition, not one based
on profit.
Question
Critically analyse the above case.
Source: http://indiankanoon.org/doc/191016/
9.6 Summary
l z The Payment of Bonus Act, 1965 (Act No. 21 of 1965) is an important law on the topic of
wages and bonus.
l z The Payment of Bonus Act, 1965 is the principal Act for the payment of bonus to the
employees which was formed with an objective for rewarding employees for their good
work for the organization.
l z It is a step forward to share the prosperity of the establishment reflected by the profits earned
by the contributions made by capital, management and labour with the employees.
l z The Payment of Bonus Act provides for payment of bonus to persons employed in certain
establishments of the basis of profits or on the basis of production or productivity and for
matters connected therewith.
l z It extends to the whole of India and is applicable to every factory and to every other
establishment where 20 or more workmen are employed on any day during an accounting
year.
l z The Act has laid down a detailed procedure for calculating the amount of bonus payable
to employees.
l z An employee shall be disqualified from receiving bonus under this Act, if he is dismissed from
service for fraud; or riotous or violent behaviour while on the premises of the establishment;
or theft, misappropriation or sabotage of any property of the establishment.
l z Every employee shall be entitled to be paid by 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.
l z The Payment of Bonus Act, 1965 provides for payment of bonus to persons employed in
certain establishments on the basis of profits or on the basis of production or productivity
and for matters connected therewith.
l z The purpose of payment of bonus is to bridge the gap between wages paid and ideal of a
living wage.
9.7 Keywords
Accounting Year: An accounting year is a twelve (to eighteen) month period over which a
company’s accounts are calculated.
Adjudication: Adjudication is a procedure for resolving disputes without resorting to lengthy
and expensive court procedure.
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