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Kavita (Manager)     15 August 2014

Diwali bonus in fnf in pvt ltd co. - eligibility

Dear All,

 

Would really appreciate your opinion on the below matter.

 

Following is the information about my present situation :

 

  • - I am working in a Private Limited Co. with only 6 employees. I have joined it in 2010. 
  •  
  • - My Gross Salary is ~30,000/month. No Provident Fund, Dearness Allowance, Conveyance or any other deductions. Only Professional Tax and TDS for Income Tax is deducted from Gross Salary.
  •  
  • - In the Offer Letter, they have not mentioned anything about Diwali Bonus. It just states that I am eligible for 35,000 per month of Salary.
  •  
  • - Company gives 1 month salary as Diwali Bonus in October or November month over and above normal salary (If you have worked for 6 months, then you get aggregate Diwali Bonus accordingly for 6 months). This is company policy, but I have not seen it  written anywhere.
  •  
  • - While giving Cheque of Monthly Salary, Company Takes Signature on Register/Slip with 1 Rs Stamp on it.
  •  
  • - In the month where Diwali Bonus has been given with salary, employer gives 1 cheque with total amount , i.e. Monthly Salary+ Bonus. (E.g. I will get Cheque of total Rs ~60,000 because 30,000 is monthly salary and 30,000 is bonus) . 
  •  
  • - I have information that in previous instances where someone has resigned, company has not paid them anything apart from Monthly salary in FNF. They do not pay aggregate Bonus in FNF.
  •  
  • - I am resigning from the company on 20th August. I will be serving Notice Period for 2 months. Hence I expect to be relieved from service on 20th October.
  •  

My Question is, can i legally ask to be paid aggregate Bonus in FNF? 

 

Please let me know if i need to share any other information too. Your comments would be very helpful.



Learning

 6 Replies

M.Sheik Mohammed Ali (advocate)     15 August 2014

yes you can claim bonus, after completion  of one year, can claim

1 Like

Kumar Doab (FIN)     15 August 2014

 

 

Apparently you are not eligible.

 

 

However: You may check how and where do you fit in.

A local Labor Consultant/Service lawyer can help you.

 

>>> The company should issue salary slip too, to all employees, showing all amounts under various heads paid to employee.

You may refer : Payment o Wages Act; Sec13A………………….

 

>>>You have used the term ‘Diwali Bonus’ although it is not on record in either appointment letter issued to you, CTC sheet, and salary slip.

“Customary bonus is bonus which is being paid by way of tradition or custom at a uniform rate over a number of years and which has no link with profit.”

 

“As attendance bonus which was being paid by the establishment was outside the purview of the Payment of Bonus Act, 1965,  workmen of the establishment can claim the bonus payable under the Act over and above the attendance bonus.“

 

Now the extract of Register can be evidence, if it is written what this additional amount pertains to………………………….. of custom to pay Diwali Bonus.

Or company has to explain!

The company has to post its expenses and shall include salary, bonus, incentives etc………..and can not falsify the record.

The Inspector under (name of the state) Shops and Commercial Establishments Act can examine record/registers.

If Payment of Gratuity Act 1972 is applicable to the establishment (if it employed 10 or more employees at any point of time) then would the company calculate entire amount of Rs.30000/ as Basic+DA for calculating amount of payable Gratuity?

If the establishment works for 5/6 days/week and if you have worked 190/240 days in a year then after 4Y190/240D you might be eligible for Gratuity.

 

>>> Bonus is payable on Basic+DA.

The Payment of Bonus Act 1965; Sec:1,2(13),8,26(4,5),31A,34,

The Government can apply the Act to any establishment employing less that 20 but not less than 10 persons. An establishment to which the Act applies shall continue to be governed by the Act irrespective of any fall in the number of person employed therein.

 

Every employee who is drawing a salary or wage upto Rs. 10000.00 per month (w.e.f. 1-4-2006) and who has worked for minimum period of 30 days in a year is entitled to be paid bonus.

 

 

An employee, irrespective of whether he is managerial or not, so long as he came within the definition of employee by virtue of drawing salary falling within the maximum prescribed under Section 2(13) of the Act, he would be eligible for payment of bonus under the Act.

 

 

Employees can enter into an agreement or a settlement with their employer for granting them bonus under a formula different from that under the Act, i.e. bonus linked with production or productivity; but subject to the provisions of the Act in respect of payment of minimum and maximum bonus.

 

 

Employer is required to maintain, in the prescribed form:

 

--A register showing the details of the amount of bonus payable to each of employees, the amount of deductions if any, and the amount actually paid.


---The employer is also required to send, in the prescribed form, an annual return to the Inspector appointed under the Act. The time limit for sending the annual return is thirty days from the expiry of the time limit specified in section 19 for payment of bonus.


 

1 Like

naresh (assistant manager)     16 August 2014

You are not eligible because as per the Payment of Bonus act sec-1 (definition) there are mandatory for Bonus that your company have minimum in 20 employees .

Regards

Naresh Choudhary

1 Like

Kavita (Manager)     16 August 2014

Dear Sheik Mohammed Ali Ji, Kumar Doab Ji and Naresh Ji, Thank you very much for your comments.

 

Dear Kumar Doab Ji, would like to inform you that in register, they do not mention the 13th Salary for Diwali separately. It is shown part of that months salary. However, in the papers company give us for annual return filing, it is shown under 'Bonus' head. And they do not issue salary slip for the Bonus nor do they show Bonus in that months salary slip.

 

Nevertheless, As they are paying 13th Salary continuously over many years, would it not become a 'Custom' even though it is not stated anywhere ?

 

And, even if it is accepted that it is a custom to pay Bonus here, is it binding on them ? Can they stop paying it any time they wish to (Here, because I would be leaving)? 

T. Kalaiselvan, Advocate (Advocate)     20 August 2014

Though the company is paying you the bonus regularly, the company never committed to such bonus anywhere either in the offer letter or T & C, meaning thereby the company is silent about the issue.  It conveys that there is no clause included in your salary and implied that which is not  there cannot be enforced by law.  You cannot claim it as a right.  Sometimes, if your date of resignation falls after the date of Diwali (bonus), you may get it but again not as a right.

Utkarsh   27 September 2018

Hello All,
I have the similar condition, I am working in an organization for the last 4.7 years. 
In my appraisal letter, they have mentioned "Annual Bonus" of 70K. And in all the previous year they are paying that bonus in "Diwali" even if in the appraisal letter it is mentioned as "Annual Bonus"

Now two condition, last year as diwali was in october 2017, so they have paid it around 15th october( i.e upto september 2017). 
Now, this time i resigned and my last date is 1st October 2018, and they are saying i am not eligible for bonus,as they pay it in diwali. Even though i have completed a year since the last bonus paid (i.e from Oct 2017- Oct 2018)

1. My concern is no where in the offer letter they have a clause, that annual bonus wont be paid if you resigned in between. They also pay it in pro-rata basis.
2. In the offer letter and appraisal letter it is mentioned as "Annual Bonus" not diwali. So, no condition of paying it on diwali.
3. I have completed a year since the last bonus paid. So, as a annual bonus, i would be eligible. As diwali is in november, so its total 13.5 months since the bonus paid.
 

Please provide any updates, will i am eligible for bonus or not. As its a big amount for me.


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