Page 247 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes Rights: Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are
the fundamental normative rules about what is allowed of people or owed to people, according
to some legal system, social convention, or ethical theory.

12.8 Review Questions

1. Who is entitled to bonus under the Payment of Bonus Act, 1965?
2. Explain the meaning of “Accounting year” under the Payment of Bonus Act, 1965.

3. Explain the meaning of ‘Allocable Surplus’ and ‘Available Surplus’ stated in the Payment
of Bonus Act, 1965.
4. X, a temporary employee drawing a salary of 3, 000 per month, in an establishment to
which the Payment of Bonus Act, 1965 applies was prevented by the employers from
working in the establishment for two months during the financial year 2001-2002, pending
certain inquiry. Since there were no adverse findings ‘X’ was reinstated in service, later,
when the bonus was to be paid to other employees, the employers refuse to pay bonus to
‘X’, even though he has worked for the remaining ten months in the year. Referring to the
provisions of the Payment of Bonus Act, 1965 examine the validity of employer’s refusal
to pay bonus to ‘X’.
5. The employer is a banking company. Point out so as to what items are required to be
added to the “Net Profit” by the employer for calculating the “Gross Profit” in accordance
with the First Schedule of the Payment of Bonus Act, 1965.
6. Prakash Chandra is working as a salesman in a company on salary basis. The following
payments were made to him by the company during the previous financial year –
(a) overtime allowance,
(b) dearness allowance,

(c) commission on sales,
(d) employer’s contribution towards pension fund,
(e) value of food.
Examine as to which of the above payments form part of “salary” of Prakash Chandra
under the provisions of the Payment of Bonus Act, 1965.
7. Specify the kinds of establishments which are not covered under the Payment of Bonus
Act, 1965.
8. Referring the provisions of the Payment of Bonus Act, 1965, state whether the following
persons are entitled to bonus under the Act:

(i) An apprentice;
(ii) An employee dismissed on the ground of misconduct;
(iii) A temporary workman;
(iv) A piece-rated worker.
9. Can the Payment of Bonus Act be made applicable to an establishment in the public
sector?
10. Discuss the powers of inspectors
11. Describe the offences and penalties of inspectors.

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