Labour Laws Q/A

ELIGIBILITY FOR BONUS

Q. Whether an employee who is not a ‘workman’ under the Industrial Disputes Act will be entitled to Bonus?

Ans. The Payment of Bonus Act, indicates that the following categories of persons will be entitled to bonus:

(a)     Skilled or unskilled or manual labour,
(b)     Managerial staff,
(c)     Supervisory staff,
(d)    Administrative staff,
(e)     Technical staff, and
(f)      Clerical staff.

An employee who has been engaged on hire or reward on terms which are either express or implied, and

(i) His salary does not exceed ` 21,000 per mensem is entitled to bonus, but he must have worked for at least 30 working days in a year;

(ii) Who is not an apprentice.

Every person who falls within the definition of the term ‘employee’ under section 2(13) of the Payment of Bonus Act, will be entitled to bonus under the Payment of Bonus Act, even if he is not a ‘workman’ under the definition of section 2(s) of the Industrial Disputes Act, 1947. The legislative validity of section 2(13) has been upheld by the Kerala High Court.1 A daily wage employee will be covered under section 2(13) of the Payment of Bonus Act, 1965 and entitled to claim bonus when he has worked for 30 days in an accounting year.2

Every employee shall be entitled to be paid bonus by his employer in an accounting year, in accordance with the provisions of the Payment of Bonus Act, 1965, provided he has worked in the establishment for not less than thirty working days in that year, irrespective of his being daily wager, casual or temporary or permanent, weekly – paid or monthly – paid.3


References:

  1. Malabar Tiles Works v. Union of India, 1976 (II) LLJ 816: AIR 1968 Ker 143.
  2. Sumitra Devi v. H.P.S.E.B., 2010 (I) LLJ 199 (HP HC).
  3. H.P. State Forest Corporation Ltd. v. Mohan Singh, 2014 LLR 474: 2014 (141) FLR 863 (HP HC).

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