Ashwani Dixit 13 May 2021

Recovery of bonus ex gratia once paid

I received ex gratia from my employer for the period 2016-17 in the month of Dec.2017.I superannuated in the month of May 2018.In the month of Aug.Sept.2017 the annual audit took placed and the audit objection established that 42% extra bonus ex gratia paid to employees,so it should be recovered from its beneficiaries. The newly nominated board of CCB passed a resolution in the year July 2020 to recover the42% bonus ex-gratia.

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This discussion addresses the recovery of an ex gratia bonus paid to an employee who later superannuated. An audit objection in 2017 found that 42% extra bonus ex gratia had been paid and recommended recovery. A board resolution in July 2020 formalised this decision. The query explores the validity and limitations of such recovery, noting that ex gratia payments generally don't fall under the EPF Act unless an MOU specifies otherwise.

3 Replies

Sankaranarayanan (Advocate) 13 May 2021

What is your issue?

Pradipta Nath (Advocate) 13 May 2021

Need to go through the documents, Please.

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 13 May 2021

Generally, there exist no limits with regards to such payments unless there is a Memorandum of Understanding (MOU) between the employer and the employee to this effect. Such ex-gratia payments do not fall under the purview of the Employee's Provident Fund Act, 1952.