Section 8 - Eligibility of
Bonus
Section
8 of the Payment of Bonus Act, 1965, states that 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 working days in that year.
The
act simply means that every employee who has completed 30 working
days in any establishment in that year is entitled to receive bonus from
the employer given that all the provisions of this Act are satisfied.
Under
this Act, every employee who is receiving salary or wages upto Rs. 3,500 p.m.
and is engaged in any kind of work whether skilled, unskilled, managerial,
supervisory etc. is entitled to bonus for every accounting year if he has
worked for at least 30 working days in that year. However, employees of L.I.C.,
Universities and Educational institutions, Hospitals, Chamber of Commerce,
R.B.I., IFCI, U.T.I. Social Welfare institutions are not entitled to bonus
under this Act.
Section 9- Disqualification for Bonus
Section
9 of the Act provides for conditions under which an employee can be
disqualified from receiving a bonus under the Payment of Bonus Act,
1965. The Act states that
Notwithstanding
anything contained in this Act, an employee shall be disqualified from
receiving bonus under this Act, if he is dismissed from service for
- Fraud;
- Riotous or
violent behavior while on the premises of the establishment; or
- Theft,
misappropriation or sabotage of any property of the establishment.
Thus,
if an employee is terminated from his job because of his inappropriate behavior
on the establishments premises, then such an
employee would not be eligible for any bonus.
Section 16 - Special Provision
In
case an establishment is newly set-up, the eligibility and payment of
bonus of employees would differentiate. The employees shall be entitled to be
paid bonus in accordance to the following provisions:
- In the first
5 years, the employees will be eligible to and shall be paid the bonus of
only those accounting years in which the employer derives profit
from such establishment and such bonus shall be calculated in accordance
with the provisions of this act in relation to that year.
- For 6th and
7th accounting years, the employees will be eligible to and shall be paid
bonus of their respective accounting years including the consideration of
set-on or set-off as illustrated in schedule 4.
