Chapter: 8.2.2 Quations of The Payment of Bonus Act

Q: Whether Bonus is payable on back-wages?

A: On this issue the High Courts differed in their opinion. As per the decision of the Madras High Court the case of Bonus is based on the principles of Labour and Management jointly contributing to the earning of profit. But when the workers had not been actually in service and hav made no contribution to profit, the employees will not be entitled to Bonus.

Rangarathinam Pillai v. Lab our Court, Coimb atore, 1969 II LLJ 41 (Mad.).

BONUS: IF PAYABLE TO APPRENTICE, PROBATIONERS, PART TIME , EMPLOYEE OR ON COMMISSION:

Our Company has Apprentices, Probationers, Part Time Employees. Some of the employees in addition to their salaries are paid commission.

Q: Whether bonus is payable to Apprentices, Probationers, Part Time Employees and on Commission paid to employees?

A: The definition of Employee u/s. 2(13) of the Payment of Bonus Act, 1965 only excludes from the scope of the term "employee" an apprentice. Therefore~apprentice shall not be eligible for bonus but probationer and part time employee shall be eligible for bonus under the Payment of Bonus Act, 1965.

Secretary Bank of Madura Ltd. v. General Secretary, Bank of Madura Employees Anion, Coimbatore & Anr. 1970 II LLJ 91 (Mad.H. C.).

The definition of salary or wage under Section 2(21) of the Payment of Bonus Act, 1965 does not include any commission payable to the employee as part of his salary or wage for the purpose of Bonus under the Payment of Bonus Act, 1965, therefore Bonus is not payable on commission.

All India Voltas and Volkart Employees' Federation, Bombay v. Mis. Voltas Ltd. & Anr. 1972 I LLJ 326 (Bom.H.C.).

BONUS: SALESMAN IF ENTITLED TO:

Our Company is engaged in the manufacturing of detergents. It has a sales network throughout the country. The company is employing large number of salesmen, whose main job is canvass for the Company's products. This is the 2nd year of Company's manufacturing activities. The Company made profits last year and therefore it paid bonus to its employees at the factory. On being advised that the salesmen are not entitled to bonus no bonus was paid to salesman. The salesman have now raised the demand of bonus.

Q: Whether salesman are entitled to Bonus under Payment of Bonus Act, 1965?

A.: Under the Payment of Bonus Act, 1965 only those persons who are employee within the meaning of S. 2(13) of the Payment of Bonus Act are entitled to Bonus under the Act. Salesman do not fall under any of the categories enumerated u/s. 2(13) of the Act and therefore as per the: decision of Bombay High Court in the case of Voltas Ltd. Salesman are not entitled to Bonus.

All India Voltas & Volkart Employees' Federation v. Voltas Ltd. 1972 I LLJ 326 (Bom.H.C.).

PRODUCTION BONUS - IF CAN BE CLAIMED BY SALES STAFF:

The workers of our company who are employed in the factory are represented by a Union which is in existence for the last 15 years. There is an elaborate Bonus Scheme under which the workers engaged in production are entitled to Production Bonus as per the terms of the Scheme which in turn is a part of the Settlement signed with the Union. In the factory there also exists a sales office and since Production Bonus has always been paid to the workers engaged in production, the staff members of the sales department were never paid Production Bonus. The staff members who are members of another Union this time have put up a demand for Production Bonus. The management resisted their claim mainly on the ground that they being not engaged in production, how can they demand Production Bonus which is meant exclusively for the workers engaged in production.