Introduction - The payment of Bonus Act 1965

INTRODUCTION

        

         The practice of paying bonus in India appears to have originated during First World War when certain textile mills granted 10% of wages as war bonus to their workers in 1917.  In certain cases of industrial disputes demand for payment of bonus was also included.  In 1950, the Full Bench of the Labour Appellate evolved a formula for determination of bonus.  A plea was made to raise that formula in 1959.  At the second and third meetings of the Eighteenth Session of Standing Labour Committee (G. O.I.) held in New Delhi in March/April 1960, it was agreed that a Commission be appointed to go into the question of bonus and evolve suitable norms.  A Tripartite Commission was set up by the Government of India to consider in a comprehensive manner,  the question of payment of bonus based on profits to employees employed in establishments and to make recommendations to the Government.  The Government of India accepted the recommendations of the Commission subject to certain modifications.  To implement these recommendations the Payment of Bonus Ordinance, 1965 was promulgated on 29^th May, 1965.  To replace the said Ordinance the Payment of Bonus Bill was introduced in the Parliament.

STATEMENT OF OBJECT AND REASONS

         A Tripartite Commission was set by the Government of India by their resolution No.WB-20(9)/61, dated 6^th December, 1961 to consider in a comprehensive manner, the question of payment of bonus based on profits to employees employed in establishments and to make recommendations to the Government.  The Commission’s Report containing their recommendations was received by the Government on 24^th January, 1964.  In their Resolution No. WB-20(3)/64, dated the 2^nd September, 1964, the Government announced acceptance of the Commission’s recommendations subject to a few modifications as were mentioned therein.  With a view to implement the recommendations of the Commission as accepted by the Government, the Payment of Bonus Ordinance, 1965, was promulgated on 29^th May, 1965.  The object of the Bill is to replace the said Ordinance.

         The notes on clauses explain the various provisions of the Bill.