LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Shivendra (Sr HR Executive)     17 November 2010

regarding payment of bonus


hello sirs,

a very warm salaam for this evening, 

I have a problem regarding the payment of bonus of a senior of mine, please go through the below mentioned details ...............


"He worked with a 55 year old company at senior level & resigned on 20-04-2010. When He asked his company for the Bonus for the yeat 2009-10, he got refused & told that he is not eligible. He has worked for total 15 years in that organisation.
If such is a case then how all these years he used to get Bonus, because his salary was always above Rs.10000 pm from date of joining. Is there a clause in Bonus act that Bonus is not payable to employees who have resigned ."


sir i think he was not eligible for the payment of the bonus from the date he joined the organisation,

but he was being paid in the name of the bonus which we generally call an Ex Gratia payment,

sir, it is very true that an Ex Gratia payment is sweet will of the organisation and generally can not be pleaded against in case of  "not payment" of it (but from the begining as far as i know),


"but in a comment over a section of the PoB Act 1965 i have read that an Ex Gratia payment can not be denied if it has been being paid for past several years"  

i am putting this page from the act itself  for refernce........





  "" 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.




(i)             Workers, who have option to attend to work at the factory premises, are entitled to bonus. [M/s. Kale Khan Mohd. Hanif v. Jhansi Bidi Mazdoor Union 1980 Lab. I.C. 1973].


(ii)            Season workers who have worked for not less than 30 working days, are entitled to bonus. U.K. Ginning & Pressing Factory v. P.O., 2nd Labour Court and Ors., (1991) 62F.L.R. 207 {Born.)].


(iii)           Eligibility for bonus depends upon the employee having worked for at least 30 working days in the year.


(iv)          There can be no condition against the statute. [Dewan's Modern Breweries Ltd. v. Industrial Tribunal & Ors., 1973 Lab.I.C. 129 (J&K)].


(v)            The employees at the Head Office are entitled to bonus at the same rate at which the workers of factory have been given by virtue of settlement. [Hindustan Construction Co. Ltd. v. G.K. Potankar & Anr., A.I.R. 1976 S.C.907].


(vi)          Employees working on part-time basis are eligible for bonus. [Arun Mills Ltd. v. Dr. Chandra Parshad C. Trivedi, (1976) 32F.L.R. 323].


(vii)         A probationer is eligible for bonus. [Bank of Madura Ltd. v. Bank of Madura Employees' Union. 1970 Lab. I.C. 1215].


(viii)        Every employee is entitled to bonus. [Mahabir Tiles Work v. Union of India, A.I.R. 1968 Ker. 143].





         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 behavior while on the premises of the establishment; or

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




      Bonus can be forfeited under section 9 only with reference to accounting year in which the employee committed fraud, theft, etc. [Himalaya Drug Co. v. P.O., 2nd Addl. Labour Court & Ors., (1986) 52F.L.R. 704].


         1[10. Payment of minimum bonus.-Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 percent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year:


     Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this section shall have effect in relation to such employee as if for the words "one hundred rupees", the words "sixty rupees" were substituted.




(i)             Ex-gratia bonus is not a bonus within the meaning of section 10 of the Act. [R.P.C. Officers' Association v. R.F.C. and Ors., 1990 L.L.R 222 (Raj.)].


(ii)            If employees have been getting ex-gratia bonus for last many a years, its payment cannot be stopped. [ibid.]


Claim for the minimum bonus lies to the Labour Court under section 33C(2) of the Industrial Disputes Act, 1947. [Kohinoor Tobacco Productions Ltd. v. P.0., 2nd Labour Court, 1986 Lab. I.C. 1055 (Bom.)].   ""

sir please see the lines above which are in this color

pleae advice me about the pursuance of the organisation for the payment of bonus.........

with thanks and regards



 4 Replies

Shivendra (Sr HR Executive)     18 November 2010

hello sirs,

plz reply, i m looking  hopefully for your answers........

with thanks and regards


Jacob Pratap (service)     19 November 2010

Dear the answer is already there in the last lines of your query.  He has a supporting judgment as quoted by you. Therefore, he should file claim u/s 33-C(2). 

Shivendra (Sr HR Executive)     20 November 2010

thank you sir,

i too have the same view, though from my position it felt difficult to suggest a rationale in favour of filing a case for the same, sir can there be more cases favouring our stand that an Ex Gratia payment can not be denied if it has been being paid for many past years, where should i look for such cases.........

sir thanking you again,

with regards


Jacob Pratap (service)     20 November 2010

pls write to me at jacobpratap@gmail.com. I will give you more stuff on this.

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register