T EP Y E TO B N SA T 965 H A MN F O U C,1

1.This act may be called the payment of Bonus Act,1965. 2.It extends to the whole of India. 3.It shall apply to a)Every factory b)Every establishment in 20 or more persons are employed on any day an accounting year, provided that the Appropriate Government may after giving not less than 2 months notice of its intention so to do by notification in the official gazette, apply the provisions of this act with effect from such accounting year as may be specified in the notification to any establishment employing less then 20 person,but the no. of person so specified shall no case be less than 10.

1.Accounting year:In relation to a Corporation, the year ending on the day on which the books of accounts of the Corporation are closed & balanced; 2.Allocable Surplus:I)In relation to an employer, being a Company(other then a banking Company) 67% of the available surplus in an accounting year. II)In any other case,60% of such available surplus.

Employees means any person(other then an apprentice)

employed on a salary Or wage not exceeding Rs3500 per mensem in any industry to do any skilled or unskilled, manual supervisory, managerial, administrative technical or clerical work for reward, if the terms &conditions of employment express or implied were fulfilled. Employer includes- In relation to an establishment which is a factory, the owner or occupier of the factory, including the agent, the legal representative of a deceased owner or occupier of a factory or the manager

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 30 days in that year.

An employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for(a)Fraud (b)Riotous or violent behavior while on the premises of the establishment; or theft, misappropriation or sabotage of any property of the establishment

Every employer shall be bound to pay to every employee in respect of the accounting year a minimum bonus which shall be 8.33% of the salary or wage earned by the employee during the accounting year or Rs 100 whichever is higher. Note- Although for the purpose of eligibility a employee drawing wages up to Rs.3500/-is covered under the Act, yet the bonus payable to him shall be on maximum Rs.2500/-only. Further Salary or Wage for the purpose of bonus means Basic Wage & Dearness Allowance only.

Where in respect of any accounting year referred to in Section 10, the allocable surplus exceeds the amount of minimum bonus payable to the employee under that section, the employer shall pay for that accounting year subject to a maximum of 20% of salary or wage as bonus.

For the purpose of Section 13 an employee shall be deemed to have worked in an establishment in any accounting year also on the days on which(a) He has been laid off under an agreement or as permitted by the Standing Order under the Industrial Employment Act,1946 or under the Industrial Disputes Act,1947 or under any other law applicable to the establishment. (b) He has been on leave or maternity leave with salary or wages. (c) He has been absent due to temporary disablement caused by accident arising out of & in the course of his employment

1.Where for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under sec.11, then the excess shall, subject to a limit of 20% of the total salary of the employees in the establishment in the accounting year. 2.Where for any accounting year, there is no allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees in the establishment under sec.10, & there is no sufficient amount carried forward.

Where in any Accounting year(a)An employer has paid any puja bonus or there customary bonus to an employee; or (b)An employer has paid a part of bonus payable under this act to an employee before the date on which such bonus becomes payable then the employer shall be entitled to deduct the amount of bonus payable by him to the employee under this act in respect of that accounting year &the employee shall be entitled to received only the balance

Where in any accounting year, an employee is found guilty of misconduct causing financial loss to the employer then, it shall be lawful for the employer to deduct the amount of loss from the amount of Bonus payable by him to the employee under this act in respect of that accounting year only &the employee shall be entitled to received the balance, if any.

{All amounts} payable to an employee by way bonus under this act shall be paid in cash by his employer. (a)Where there is a dispute regarding payment of bonus pending before any authority under Sec,22. within a month from the date on which the award because enforceable or the settlement comes in to operation in respect of such disputes; (b)In any other case, within a period of eight months from the end of the accounting year;

Every employer shall prepare & maintain such registers ,records & other documents in such form &in such manner as may be prescribed

a)Appointment- The appropriate government may by notification in the official gazette appoint such person as it thinks fit to be inspectors for the purpose of this act &may be define jurisdiction within which they shall exercise, b) Power1.Require information from the employer as he may consider necessary.

2.Enter in the establishment on premises connected to the establishment. 3.Production of registers/records & other document for examination.

4.Examine any person for the purpose of this act. 5.Make copies of or take extracts from any book, registers or other documents 6.Every inspector shall be deemed to be a public servant within the meaning of Sec.21 of the I.P.C.

a)Contravenes any of the provision of this act or any rule made there under or b)Fails to comply with the provision or direction shall be punishable with imprisonment for a term which may extend to 6 months or with fine which may extend to Rs.1000/-only,or with both.

This section introduced in 1976. Under this section bonus can be paid linked to Productivity in lieu of Profit sharing. For this purpose the Employer & the Union need to enter in to a productivity linked bonus agreement. Under the productivity linked bonus agreement the minimum & maximum bonus has to be within the frame work of the Payment of Bonus Act.1965,ie, minimum 8.33% & maximum 20%.

The payment of Bonus shall not be applicable to the following establishment: a)The Life Insurance Corporation of India. b)Nationalized Banks. c)Public Sector Undertakings. However when a Public Sector undertaking competes with the Private Section Undertaking, the payment of Bonus Act, applies to such undertaking. N0te:-Newly setup establishment are exempted from the provision of Payment of Bonus Act,1965 for a period of 5 years during the infancy period. However from the year they start making profits, the Act becomes applicable even before the completion of 5 years.

THANK YOU

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