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Timestamp: 2019-04-24 23:46:37+00:00

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(2) It extends to the whole of India [Note: The words “except the State of Jammu and Kashmir” omitted by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September,1971).
(5) An establishment to which this Act applies [Note: The words, brackets, letter and figure “under Cl. (b) of sub-section (3)” omitted by Act 23 of 1976, Sec.8 (w.e.f. 25th September, 1975)] shall continue to be governed by this Act notwithstanding that the number of persons employed therein falls below twenty [(Note: Ins. by Act 23 of 1976, Sec-3, (w.e.f. 25th September, 1975) or, as the case may be, the number specified in the notification issued under the proviso to sub-section (3)].
1. Shot title and commencement – (1) This Act may be called the Payment of Bonus (Amendment) Act, 1977.
(2) It shall come into force on the third day of September, 1977.
Have effect in respect of the accounting year commencing on any day in the year 1976 [and in respect of the accounting year commencing on any day in the year 1977], as if the amendments specified in Sections 3 to 19 has been made in that Act.
Explanation – In this section, the expressions “banking company” and “accounting year” shall have the meanings respectively assigned to them in clauses (8) and (1) of Section 2 of the principal Act”.
(8) “Banking company” means a banking company as defined in Sec.5 of the Banking Companies Act, 1949 (10 of 1949), and includes the State Bank of India, any subsidiary bank as defined in the State Bank of India (Subsidiary Bank) Act, 1959 (38 of 1959), [(Note: Ins. by Act 23 of 1976 Sec.4 (w.e.f. 25th September, 1975) any corresponding new bank specified in the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, (5 of 1970), [Note: Ins. by Act 66 of 1980, (w.e.f. 21st August, 1980) any corresponding new bank constituted under Sec.3 of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980] any co-operative bank as defined in Cl. (bii) of Sec.2 of the Reserve Bank of India Act, 1934 (2 of 1934),] and any other banking institution which may be notified in this behalf by the Central Government.
(viii) Any commission payable to the employee.
Explanation – Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to form part of the salary or wage of such employees.
(22) Words and expressions used but not defined in this Act and defined in the Industrial Disputes Act, 1947 (14 of 1947), shall have the meanings respectively assigned to them in that Act.
Provided that where for any accounting year a separate balance-sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then, such department or undertaking or breach shall be treated as separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus.
When there is integral link and unity of management between the two division of a company it cannot be said as a separate undertaking although it is 60 miles away from one division. Gawlior Rayon Silk Mfg. Co. v. Industrial Tribunal 1975 Lab. I.C. 820.
(a) In the case of a banking company, be calculated in the manner specified in the First Schedule ; (b) In any other case, be calculated in the manner specified in the Second Schedule.
The available surplus in respect of any accounting year shall be the gross profits for that year after deducting therefrom the sums referred to in Sec.6.
The burden of proving that the depreciation claimed is the correct amount admissible under Section 32 (1) of Income-tax Act lies on the party claiming such amount. Workmen of National and Grindlays Bank Ltd. v. National and Grindlays Bank Ltd., AIR 1976 S.C. 611.
(d) Such further sums as are specified in respect of the employer in the [(Note: Ibid) Third Schedule].
(e) No account shall be taken of any rebate [(Note: Subs. by Act 66 of 1980) other than development rebate or investment allowance or development allowance)] or credit or relief or deduction (not hereinafter mentioned in this section) in the payment of any direct tax allowed under nay law for the time being in force relating to direct taxes or under the relevant annual Finance Act, for the development of any industry.
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.
Provided that there an employee has not employed fifteen years of age at the beginning of the accounting year, the provision 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.
(1) Where in respect of any accounting year referred to in Sec.10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage.
(2) In computing the allocable surplus under this section, the amount set on or the amount set-off under the provisions of Sec.15 shall be taken into account in accordance with the provisions of that section.
Where the salary or wage of an employee exceeds one thousand and six hundred rupees per mensem, the bonus payable to such employee under Sec.10, or as the case may be, under Sec.11, shall be calculated as if his salary or wage were one thousand and six hundred rupees per mensem.
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.
Working days – Words ‘working day in any accounting year’ – meaning of – factory working in a particular season only and not during the whole year in such a case the ‘working days’ only mean those days of the year during which the employee concerned is actually allowed to work. (Shakkar Mills Mazdoor Sangh v. Gwalior Sugar Co. Ltd., 1985 JLJ 294 = AIR 1985 SC 758).
(1) Where for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under Sec.11, the, the excess shall, subject to a limit of twenty per cent of the total salary or wage of the employees employed in the establishment in that accounting year, be carried forward for being set-on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year to be utilized for the purpose of payment of bonus in the manner illustrated in the Fourth Schedule.
(2) Where for any accounting year, there is no available surplus or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees in the establishment under Section 10, and there is no amount or sufficient amount carried forward and set on under sub-section (1) which could be utilized for the purpose of payment of the minimum bonus, then, such minimum amount or the deficiency, as the case may be, shall be carried forward for being set-off in the succeeding accounting year and so on up to and inclusive of the fourth accounting year in the manner illustrated in the Fourth Schedule.
(3) The principle of set-on and set-off as illustrated in the Fourth Schedule shall apply to all other cases not covered by sub-section (1) or sub-section (2) for the purpose of payment of bonus under this Act.
(4) Where in any accounting year any amount has been carried forward and set-on or set-off under this section, then, in calculating bonus for the succeeding accounting year, the amount of set-on or set-off carried forward from the earliest accounting year shall first be taken into account.
(1) Where an establishment is newly set up, whether before or after the commencement of this Act, the employees of such establishment shall be entitled to be paid bonus under this Act in accordance with the provisions of sub-section (1-A), (1-B) and (1-C).
(1-A) In the first five accounting years following the accounting year in which the employee sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, bonus shall be payable only in respect of the accounting year in which the employer derives profit from such establishment and such bonus shall be calculated in accordance with the provisions of this Act in relation to that year, but without applying the provisions of Sec.15.
(ii) For the seventh accounting year – Set-on or set-off, as the case may be, shall be made in the manner illustrated the [(Note: Subs. by Act 66 of 1980, (w.e.f. 25th September,1975) Fourth Schedule] taking into account the excess of deficiency, if any, as the case may be, of the allocable surplus set-on or set-off in respect of the fifth, sixth and seventh accounting years.
(1-C) From the eighth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, the provisions of Sec.15 shall apply in relation to such establishment as they apply in relation to any other establishment.
Explanation I – For the purpose of sub-section (1), an establishment shall not be deemed to be newly set up merely by reason of a change in its location, management, name or ownership.
(a) He has made provision for that year’s depreciation, to which he is entitled under the Income-tax Act or, as the case may be, under the agricultural income-tax law ; and (b) The arrears of such depreciation and losses incurred by him in respect of the establishment for the previous accounting years have been fully set-off against his profits.
Provided that if an employer in relation to an existing establishment consisting of different departments or undertakings or branches (whether or not in the same industry) set up at different periods has, before the 29th May, 1965, been paying bonus to the employees of all such departments or undertakings or branches irrespective of the date on which such departments or undertakings or branches were set up, on the basis of the consolidated profits computed in respect of all such departments or undertakings or branches, then, such employer shall be liable to pay bonus in accordance with the provisions of this Act to the employees of all such departments or undertakings or branches (whether set up before or after that date) on the basis of the consolidated profits computed as aforesaid.
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.
[(Note: Subs. by Act 23 of 1976, (w.e.f. 25th September, 1975) All amounts] payable to an employee by way of bonus under this Act shall be paid in cash by hi employer.
Provided that the appropriate Government or such authority as the appropriate Government may specify in this behalf may, upon an application made to it by the employer and for sufficient reasons, by order, extend the said period of eight months to such further period or periods as it thinks fit ; so, however, that the total period so extended shall not in any case exceed two years.
(Note: Sub-sections (2) to (7) inserted by Act 68 of 1972, Sec.4 omitted by Act 23 of 1976, Sec.13 (w.e.f. 25th September, 1975).
(Note: Sub-section (8) inserted by Act 39 of 1973, Sec.4, omitted by Act 55 of 1973, Sec.2 (w.e.f. 1st September, 1973).
3. Portion of bonus credited in the provident fund account to be refunded. – Where in pursuance of the provisions of Section 19 of the principal Act, any portion of the bonus paid to an employee in respect of the accounting year commencing on any day in the year 1972 has been remitted by the employer before the commencement of this Act to the authority maintaining the provident fund account of such employee for crediting the same in that account, such authority shall, notwithstanding anything contained in any other law (including any scheme) for the time being in force, refund such portion to the employee”.
[(Note: Renumbered by Act 66 of 1980)1] If in any accounting year an establishment in public section sells any goods produced or manufactured by it or renders any services, in competition with an establishment in private sector, and the income from such sale or services or both is not less than twenty per cent of the gross income of the establishment in public sector for that year, then, the provisions of this Act shall apply in relation to such establishment in public sector as they apply in relation to a like establishment in private sector.
Explanation – In this section and in [(Note: Subs. by Act 66 of 1980, (w.e.f. 21st August, 1980) Secs. 22, 23, 24 and 25], “employee” includes a person who is entitled to the payment of bonus under this Act but who is no longer in employment.
Where any dispute arises between an employer and his employees with respect to the bonus payable under this Act or with respect to the application of this Act to an establishment in public sector, then, such dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Dispute Act, 1947 (14 of 1947), or of any corresponding law relating to investigation and settlement of industrial disputes in force in a State and the provisions of that Act or, as the case may be, such law, save as otherwise expressly provided, apply accordingly.
Provided that where the said authority is satisfied that the statements and particulars contained in the balance-sheet or the profit and loss account of the corporation or the company are not accurate, it may take such steps as it thinks necessary to find out the accuracy of such statements and particulars.
(2) When an application is made to the said authority by any trade union being a party to the dispute or where there is not trade union, by the employees being a party to the dispute, requiring any clarification relating to any item in the balance-sheet or the profit and loss account, it may, after satisfying itself that such clarification is necessary, by order, direct the corporation or, as the case may be, the company, to furnish to the trade union or the employees such clarification within such time as may be specified in the direction and the corporation or, as the case may be, the company shall comply with such direction.
(1) Where any dispute of the nature specified in Sec.22 between an employer, being a banking company, and its employees has been referred to the said authority under that section and during the course of proceedings the accounts of the banking company duly audited are produced before it, the said authority shall not permit any trade union or employees to question the correctness of such accounts, but the trade union or the employees may be permitted to obtain from the banking company such information as is necessary for verifying the amount of bounds due under this Act.
(2) Nothing contained in sub-section (1) shall enable the trade union or the employees to obtain any information which the banking company is not compelled to furnish under the provisions of Sec. 34-A of the Banking Regulation Act, 1949 (10 of 1949).
(1) Where any dispute of the nature specified in Section 22 between an employer, not being a corporation or a company, and his employees has been referred to the said authority under that section and the accounts of such employer audited by any auditor duly qualified to act as auditor of Companies under sub-section (1) of Section 226 of the Companies Act, 1956 (1 of 1956), are produced before the said authority, the provisions of Section 23, shall, so far as may be, apply to the accounts so audited.
(2) When the said authority finds that the accounts of such employer have not been audited by any such auditor and it is of opinion that an audit of the accounts of such employer is necessary for deciding the question referred to it, then it may, by order, direct the employer to get his accounts audited within such time as may be specified in the direction or within such further time as it thinks fit and thereupon the employer shall comply with such direction.
(3) Where an employer fails to get the accounts audited under sub-section (2) the said authority may, without prejudice to the provisions of Sec.28 get the accounts audited by such auditor or auditors as it thinks fit.
(4) When, the accounts are audited under sub-section (2) or sub-section (3) the provisions of Sec.23 shall, so far as may be, apply to the accounts so audited.
(1) The appropriate Government may, by notification in the official Gazette, appoint such persons as it thinks fit to be Inspectors for the purpose of this Act and may define the limits within which they shall exercise jurisdiction.
(3) Every Inspector shall be deemed to be a public servant within the meaning of the Indian Penal Code (45 of 1860).
(4) An person required to produce any accounts, book, register or other document or to give information by an Inspector under sub-section (1) shall be legally bound to do so.
[(Note: Subs. by Act 66 of 1980 (w.e.f. 21st August, 1980) (5) Nothing contained in this section shall enable an Inspector to require a banking company to furnish or disclose any statement or information or to produce, or give inspection of, any of its books of account or other documents, which a banking company cannot be compelled to furnish, disclose, produce or give inspection of, under the provisions of Sec. 34-A of the Banking Regulation Act, 1949( 10 of 1949)].
(a) Contravenes any of the provisions of this Act or any rule made thereunder; or (b) To whom a direction is given or a requisition is made under this Act fails to comply with the direction or requisition.
provided that nothing contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be proceeded against and punished accordingly.
(a) “Company” means any body corporate and includes a firm or other association of individuals; and (b) “Director”, in relation to a firm, means a partner in the firm.
(2) No Court inferior to that of a presidency magistrate or a magistrate of the first class shall try any offence publishable under this Act.
No suit, prosecution or other legal proceeding shall lie against the Government or any officer of the Government for anything which is in good faith done or intended to be done in pursuance of this Act or any rule made thereunder.
(ii) Employees employed by inland water transport establishments operating on routes passing through any other country.
Applicability of the provisions of the Bonus Act to employees the Defence ministry canteen stores department. It was held that canteen stores department is an “establishment” engaged in any industry carried on by or under the authority of any department of the Central Government. (Radhu-k-Kallde of Bombay v. Union of India and other (1986) 1 S.C.J.5).
33. Act to apply of certain pending dispute regarding payment of bonus.
Rep. by the Payment of Bonus (Amendment) Act, 1976 (23 of 1976), Section 21 (w.e.f. 25th September, 1975).
(a) 8.33 per cent of the salary or wage earned by them during accounting year if the employer has no allocable surplus in the accounting year or the amount of such allocable surplus is only so much that, but for the provisions of sub-section (2-A)of Section 10, it would entitle the employees only to receive an amount of bonus which is less than the aforesaid percentage, or (b) Twenty per cent, of the salary or wage earned by them during the accounting year.
Employer and workmen enter into settlement before Conciliation Officer on 9th October, 1972 within the meaning of Sec.34 (3) of Payment of Bonus Act – On a reference before the tribunal workmen claims three month Salary as customer’s bonus or 2% of salary as per the Act – Validity of award directing payment of three months basic wages as on 31st March 1972 instead of 31st March 1970 in term 1 of the Settlement. (Dishergarh Power Supply Co., Ltd. v. The Workmen of Dishergarh Power Supply Co., Ltd., (1986) 3 SCJ 247).
Subject to the provisions of Sections 31-A and 34, the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service.
Nothing contained in this Act shall be deemed to affect the provisions of the Coal Mines Provident Fund and Bonus Schemes Act, 1948 (46 of 1948), or of any scheme made there under.
If the appropriate Government, having regard to the financial position and other relevant circumstances of any establishment or class of establishments, is of opinion that it will not be in public interest to apply all or any of the provisions of this Act thereto, it may, by notification in the official Gazette, exempt for such period as may be specified therein and subject to such conditions as it may think fit to impose, such establishment or class of establishments from all or any of the provisions of this Act.
The Court has jurisdiction to consider whether the powers under Section 36 has been properly exercised by the Government.
Consideration of the profits for one previous year cannot amount to consideration of “the financial position” of an establishment within the terms of Section 36 of the Bonus Act. (M/s, Fashan Electric Dry Cleaners v. The Government of A.P. (1977) 1 An. A.W.R.27).
Rep. by the Payment of Bonus (Amendment) Act, 1976 (23 of 1976), Section 23 (w.e.f. 25th September, 1975).
(1) The Central Government may make rules for the purpose of carrying into effect the provision of this Act.
(3) Every rule made under this section shall be laid as soon as may be after it is made, before each House of Parliament while it is in session for a total period of thirty days, which may be comprised in one session [(Note: Subs. by Act 23 of 1976, (w.e.f. 25th September, 1975) or in two or more successive session], and if before the expiry of the session [(Note: Subs. by Sec.21, ibid, (w.e.f. 25th September, 1975) immediately following the session or the successive sessions aforesaid], both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect as the case may be; so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.
Save as otherwise expressly provided, the provisions of this Act shall be in addition to and not in derogation of the industrial Disputes Act, 1947 (14 of 1947) or any corresponding law relating The Orient Tavern investigation and settlement of industrial disputes in force in a State.
(1) The Payment of Bonus Ordinance, 1965 (3 of 1965) is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under this Act as if this Act commenced on the 29th May, 1965.
(If, and to the extent, credited to Profit and Loss Account) Total of Item No.6 Rs. 7.Gross Profits for purposes of bonus (Item No.5 minus Item No.6) Rs.
Explanation – In sub-item (b) of item 3, “approved gratuity fund” has the same meaning assigned to it in Cl. (5) of Sec.2 of the Income-tax Act.
1. Net Profit as per Profits and Loss Account.
Total of Item No.6 Rs. 7. Gross Profits for purposes of bonus (item No.5 minus Item No.6) Rs.
[(Ins. by s 26. (w.e.f. 25th September, 1975) Explanation – In sub-item (aa) of Item 3, “approved gratuity fund” has the same meaning assigned to it in Cl. (5) of Sec.2 of the Income-tax Act.
2. (Note: Ins. by Act 66 of 1980, (w.e.f. 21st August, 1980).
The total remuneration payable to all such partners is higher than the said 25 percent. Such percentage, or a sum calculated at the rate of forty-eight thousand rupees to each such partner, which ever is less.
6.Any employer failing under Item No.1 or Item No.3 or Item No.4 or Item No.5 and being a licensee within the meaning or the Electricity (Supply) Act, 1948 (54 of (1948).In additional the sums deductible under any of the aforesaid Items, such sums as are required to be appropriated by the licensee in respect of the accounting year to a reserve under the Sixth Schedule to that Act shall also be deducted.
(b) Any amount set apart for meeting any depreciation in excess of the amount admissible in accordance with the provisions of Cl. (a) of Sec.6].
In this Schedule, the total amount of bonus equal to 8.33 per cent of the annual salary or wage payable to all the employees is assumed to be Rs.1,04,167. Accordingly, the maximum bonus to which all the employees are entitled to be paid (twenty per cent of the annual salary or wage of all the employees) would be Rs. 2,50,000.
Amount equal to sixty percent or sixty-seven percent, as the case may be, or available surplus allocable as bonus.
(2) These shall come into force at once on the date of their publication in the official Gazette.
(c) “Section” means a section of the Act.
(a) In the case of an establishment in relation to which the Central Government is the appropriate Government under the Act, the Chief Labour Commissioner (Central); (b) In any other case, the Labour Commissioner of the State in which the establishment is situated.
(c) A register showing the details of the amount of bonus due to each of the employees, the deductions under Secs.17 and 18 and the amount actually disbursed, in Form C.
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