Page 324 - DMGT516_LABOUR_LEGISLATIONS

Unit 13: Wage Legislation

Payment of minimum bonus Notes

Subject to the other provisions of this Act, every employer shall be bound to pay to every
employee in respect of the accounting year commencing on any day in the year 1979 and in
respect of every subsequent accounting year, a minimum bonus which shall be 8.33 per cent of
the salary or wage earned by the employee during the accounting year or one hundred rupees,
whichever is higher, whether or not the employer has any allocable surplus in the accounting
year. Provided that where an employee has not completed fifteen years of age at the beginning
of the accounting year, the provisions of this section shall have effect in relation to such employee
as if for the words “one hundred rupees”, the words “sixty rupees” were substituted.

Payment of maximum bonus

(1) Where in respect of any accounting year referred to in section 10, the allocable surplus
exceeds the amount of minimum bonus payable to the employees under that section, the
employer shall, in lieu of such minimum bonus, be bound to pay to every employee in
respect of that accounting year bonus which shall be an amount in proportion to the salary
or wage earned by the employee during the accounting year, subject to a maximum of
twenty per cent of such salary or wage.
(2) In computing the allocable surplus under this section, the amount set on or the amount set
off under the provisions of section 15 shall be taken into account in accordance with the
provisions of that section.

Set on and set off of allocable surplus

(1) Where for any accounting year, the allocable surplus exceeds the amount of maximum
bonus payable to the employees in the establishment under section 11, then, the excess
shall, subject to a limit of twenty per cent of the total salary or wage of the employees in
the establishment in that accounting year, be carried forward for being set on in the
succeeding accounting year and so on up to and inclusive of the fourth accounting year to
be utilised for the purpose of payment of bonus in the manner illustrated in the Fourth
Schedule.
(2) Where for any accounting year, there is no available surplus or the allocable surplus in
respect of that year falls short of the amount of minimum bonus payable to the employees
in the establishment under section 10, and there is no amount or sufficient amount carried
forward and set on under sub-section (1) which could be utilised for the purpose of payment
of the minimum bonus, then, such minimum amount or the deficiency, as the case may be,
shall be carried forward for being set off in the succeeding accounting year and so on up to
and inclusive of the fourth accounting year in the manner illustrated in the Fourth Schedule.
(3) The principle of set on and set off as illustrated in the Fourth Schedule shall apply to all
other cases not covered by sub-section (1) or sub-section (2) for the purpose of payment of
bonus under this Act (4), where in any accounting year any amount has been carried
forward and set on or set off under this section, then, in calculating bonus for the succeeding
accounting year, the amount of set on or set off carried forward from the earliest accounting
year shall first be taken into account.

Special provisions with respect to certain establishments

(1) Where an establishment is newly set up, whether before or after the commencement of
this Act, the employees of such establishment shall be entitled to be paid bonus under this
act in accordance with the provisions of sub-sections (IA), (1B) and (IC).

LOVELY PROFESSIONAL UNIVERSITY 319