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Author Name: H L Kumar
Publication Year: 2016
By amending sections 2(13) and 21 of the Payment of Bonus Act, 1965, by the Amendment Act (6 of 2016), it has now widened the scope of ‘employees’ as eligible for payment of bonus from those drawing salary of Rs.10,000 per month, to Rs. 21,000 per month. However, the retrospective effect of the applicability of the Act w.e.f. 1-4-2014 has not been appreciated by the employers since the bonus for the year 2014-15 had already been paid by November, 2015 and as such many employers or their associations have filed the writ petitions in different High Courts. The retrospective effect of the amending Act has been stayed by interim orders of the High Courts. Keeping in view the pendency of writ petitions in as many as nine High Courts whereby the retrospective effect of the amendment had been stayed, the Union of India has filed a writ petition in the Supreme Court praying that all these writ petitions be heard and disposed of by the Supreme Court. Accordingly, notices have been issued to the petitioners. The outcome of the order/decision is awaited but could take sufficient time since the petitioners will be filing their objections and affidavits in support of transfer of petitions and the interim stay orders. Section 12 of the Payment of Bonus Act has been amended to state that the salary or wage of an employee exceeds Rs. 7,000 per month or the minimum wages fixed in the scheduled employment, the bonus payable to such employee shall be calculated as if his salary or wage were Rs. 7,000 per month or the minimum wage fixed under the Minimum Wages Act, 1948 for the scheduled employment, whichever is higher. Every effort has been made to simplify the provisions of the Act which are based on the ratios of the important decisions of the Supreme Court and High Courts. However, the calculation of bonus cannot be precisely given since some changes invariably take place every year when the Finance Act is amended. Basic principles are explained, hence it will not be difficult for the account experts or the chartered accountants to calculate bonus. The interpretations as given in this publication, will give them more confidence for calculations.
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