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Sonu (LWO)     23 December 2011

Bonus act 1965

Sir/Madam,

Our company is a psu and i have been working in HR dept. and looking after contractual labour matters, i would like to know about the liability of Principal Employer of payment of Bonus. We are giving the bonus as per entitlement to our contractor @8.33% but the same is not being paid by them to their contractual employees. the contract was started in april, 10, (valid upto 2013) the point is that contractor says he would pay the bonus amoutn after the financial year 2012 in the month of Oct, 2012 at the time of diwali. May please clarify will he be liable to pay the bonus to contractual employees of the period of April, 10 to Sept, 10 in the same year in October as we have already paid them.

May please suggest

 

SK Raman

Delhi



Learning

 11 Replies

Vinod kashyap (Advocate & Legal advisor)     24 December 2011

Yes being principal employer you are liable.

Jacob Pratap (service)     24 December 2011

I feel that the liablity of the Principal Employer with respect to the contract Labour is not with regard to payment of bonus but is limited to section 20 and 21 of the Contract Labour (R&A) Act, 1970 which is as under:-

 

"20. Liability of principal employer in certain cases.- (1) If any amenity required  to be provided under section 16, section 17, section 18 or section 19 for the benefit of the contract labour employed in an establishment is  not provided  by  the  contractor  within  the  time prescribed thereof,  such amenity shall be provided by the principal employer within such time as may be prescribed.

 

(2) All  expenses incurred by the principal employer in providing the amenity  may be  recovered by  the  principal  employer  from  the contractor  either  by  deduction  from  any  amount  payable  to  the contractor under any contract or as a debt payable by the contractor.

 

21. Responsibility  for payment of wages.- (1) A contractor shall be responsible  for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed.

 

(2) Every principal employer shall nominate a representative duly authorized by  him to  be present at the time of disbursement of wages by the  contractor and  it shall be the duty of such representative to certify the amounts paid as wages in such manner as may be prescribed.

 

(3) It  shall be  the  duty  of  the  contractor  to  ensure  the disbursement of wages in the presence of the authorized representative of the principal employer.

 

(4) In  case the contractor fails to make payment of wages within the prescribed  period or  makes short  payment,  then  the  principal employer shall  be liable  to make  payment of  wages in  full or  the unpaid balance  due, as  the case  may  be,  to  the  contract  labour employed by  the contractor  and recover  the amount  so paid from the

 contractor  either  by  deduction  from  any  amount  payable  to  the contractor under any contract or as a debt payable by the contractor."

 

Although certain other provisions like PF ESI etc. there is liability of PE fastened with respect to their contractor; however, under the Payment of Bonus Act, 1965 I do not find any such mention.  

 

Further, the terms and conditions between the PE and the Contractor with respect to the workers dues under labour laws is also to be seen. 

AMIT TEWARI (SR. MANAGER)     25 December 2011

One more aspect that is to be seen is the relationship between the contractor & principal Employer. If he is a independent Contractor & the Principal Employer has discharged his liability then Pricipal employer cannot be defaulted for non payment. It is the first party i.e contractor who has defauklted , hence he can only be held liable.

Thanks & regards

amit tewari

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     23 April 2012

Principle employer is liable. Mr.Jacob  pratap elaborate explanation is very good.

yogesh naik (Major Incident manager)     14 July 2012

Hi Sir

I Yogesh Naik Working for the ITSource India PVt LTD from last 2 years.My company deducting rs 500 every month with the name of bonus, and you have to ask them every year for bonus.Is that legal...if not so wh should I do please suggest...

Vinod kashyap (Advocate & Legal advisor)     14 July 2012

It is mention in your monthly salary slip ? or It is part of CTC? 

yogesh naik (Major Incident manager)     15 July 2012

Hi Vinod

same is mentioned in my salary slip,

So is that legal 

Kumar Doab (FIN)     16 July 2012

You may lodge a query in writing and under acknowledgment, with the good office of your appointing authority, MD with a copy to Head-HR, and request to supply you a written reply.

Apparently the action is wrong.

Grossly speaking it may be ascertained the deduction is reduction or recovery, adjustment or disqualification.

Valuable advice of learned experts/members is sought.

 

 

 

 

 

8.      Eligibility for bonus.—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 thirty working days in that year.

 

9.      Disqualification for bonus.—Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for --

(a)   fraud; or

(b)   riotous or violent behaviour while on the premises of the establishment; or

(c)   theft, misappropriation or sabotage of any property of the establishment.

5[13. Proportionate reduction in bonus in certain cases.—Where an employee has not worked for all the working days in an accounting year, the minimum bonus of one hundred rupees or, as the case may be, of sixty rupees, if such bonus is higher than 8.33 per cent, of his salary or wage for the days he has worked in that accounting year, shall be proportionately reduced.]

17.    Adjustment of customary or interim bonus against bonus payable under the Act.—Whether in any accounting year --

 

(a)   an employer has paid any puja bonus or other customary bonus to an employee; or

(b)   an employer has paid a part of the bonus payable under this Act to an employee before the date on which such bonus becomes payable.

 

then, the employer shall  be entitled to deduct the amount of bonus so paid from the amount of bonus payable by him to the employee under this Act in respect of that accounting year and the employee shall be entitled to receive only the balance.

18.    Deduction of certain amounts from bonus payable under the Act. – Where in any accounting year, an employee is found guilty of misconduct causing financial loss to the employer, then, it shall be lawful for the employer to deduct the amount of loss from the amount of bonus payable by him to the employee under this Act in respect of that accounting year only and the employee shall be entitled to receive the balance, if any.

27.    Inspectors.

29.    Offences by companies.-  (1) If the person committing an offence under this Act is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

 


Attached File : 428130775 pba.doc downloaded: 179 times

bhaveshp.1377 (Executive)     29 July 2012

On what amount bonus is calculated? Basic? or Basic+HRA+others.....?

shivam...... (Chief Manager)     27 April 2016

Kindly read Judgement Cominco Binani Zinc Ltd Vs Pappachan (1989) ILLJ 1988 on the issue where in it has been held that Bonus is not part of wage and not payable by principal employer 

 

Kumar Doab (FIN)     27 April 2016

Similar discussion is also at:

 

https://www.lawyersclubindia.com/forum/details.asp?mod_id=135703&offset=1

 

 


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