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KS (SM)     15 March 2010


Hi.  Can companies refrain from paying minimum Bonus citing reasons as recession, poor cash flow etc.?

Can Bonus for the previous financial be claimed retrospectively even if the employee has left the company?

Several companies do not pay bonus and cite that it will be paid only for employees who are on rolls on the day the payment is made? Is it right as per law?

Request the forum to let me have their valued inputs on the above.




 5 Replies

V. VASUDEVAN (LEGAL COUNSEL)     15 March 2010

Please check the presentation Mr.Vijayrajpc a member of this forum on u-tube:www.authorstream.com/Presentation/vijayarajpc-210179-payment-bonus-act-1965-education-ppt-powerpoint/. This is an excellent guideline and let us thank him for this contribution.

Adviser-HRManagement (n/a)     15 March 2010

Dear KS,

In case the ppt of Mr Vijayaraj did not give you specific points as queried by you, here are the clarifications to your query:


1)  Minimum Bonus is mandatory at all times, recession, cash-flow problem etc., are irrelevant.

2) Bonus by ex-employee can be claimed even after leaving the job.  In the normal course, the company should send out the bonus cheque to ex-employee's address in the subsequent financial year.  If not so sent, the employee can/should claim it.

3) It is not right/legal for the companies to say that bonus is paid only to live-employees, and not ex-employees.  Bonus is for the "service rendered" irrespective of whether one is in service or not.

4) There are limitations:  Eligibility for bonus is for those whose salary is Rs.10K or below.  Non-payment of bonus should be claimed within 12 months from the end of financial year.  Company has time to pay bonus upto 8 months from the end of financial year.

5) Nature of industry, wither factory, IT indusitry, Shops & Establishments etc., are imaterial for claiming bonus. Designation is also imaterial.  Any dispute for claims is to be lodged with the local Labour Dept who normally resolves the issue.  If not resolved, it goes to Tribunal.  Claims are inexpensive.


Hope clear.  Ravi, Adviser-HRManagement.

KS (SM)     16 March 2010

Thanks sir for your response.  In this case the company has not paid for the FY 08-09, payable in 09.  It is alreadty nearing 12 months from the end of the FY.

How can an existing employee take up this.  It may amount to torture later if one takes up this.  Is there any way out for this.



Adviser-HRManagement (n/a)     18 March 2010

Dear KS,

Your first query dated 15th March implied that some "ex-employee/s" were not paid the Bonus for the previous financial year.  Hence, the kind of response as sent by me on 15th March.  Now, your present writing reflects that you, your colleages etc., being employees in service, have not been paid thebonus.


Yes. I agree that if the employee/s in service file a petition, they will land in a situation of embarassment/ harassment etc.  Though it must be noted that there are several cases of the employee in service filing petition/ fighting the cause, succeeding, and yet working happily.  You, however, apprehend harrassment.  You also do not seem to have a Trade Union.


Under the circumstances, you must "tip off" an authority of the local Labour Dept, without any specific/ identified letter from you, that the Company has denied Bonus payment to its employees for the previous financial year (on reason of recession etc), and that the authority should carry out inspection of records under te Bonus Act (Form-C, D, etc), and direct the company to effect payment of bonus forthwith, and file the compliance report.  Our experience is that the Labour authorities ignore minor issues (for a consideration from the Mgmt), but not wholesome violation of non-payment of Bonus.  They will even interview the employees concerned, and the employees cannot be "advised" to lie!


I hope you got the point as to how to prompt the Labour authorities to jump to the issue and rescue you. 

Wish you all the best.


Ravi, Adviser-HR Management


ani (self employed)     24 November 2010


As per the Payment of Bonus Act, one  can claim bonus subject to his salary should be Rs 10000/- per month or below.

Please clarify if this Salary is Basic salary and what other compnents of salary?

If in case the Gross Salary is more than 10,000/- and the basic is around 4000/-In that case can the employee claim Bonus or not?

Please confirm

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