3.9.1 Object – to provide for the payment of Bonus on the basis of profit or production or productivity, define principles, formula, and...
3.9.1 Object – to provide for the payment of Bonus on the basis of profit or production or productivity, define principles, formula, and machinery liability for the payment of Bonus. 3.9.2 Scope – it applies to every factory wherein 10 or more persons are employed running with the aid of power and in other cases including establishments 20 or more employees are employed. But it does not apply to LIC, Central or State Govt. establishments, Indian Red Cross Society, Universities and Educational Institutions. Hospitals, Chamber of Commerce, R.B.I., I.F.C.I., U.T.I., Social Welfare Institutions, Local Bodies. What they are paying as bonus is ex gratia payment. 67 Legal Aspects of Hospital Management – Dr. B.G. Maniar
For the purpose of counting the number of employees department or branches are to be clubbed, unless considered separate and preparing a separate balance sheet. Coverage –an employee who has worked for 30 working days in an accounting year and drawing wages up to Rs. 10,000/- p.m. ( for calculation purpose Rs.3500/- p.m. maximum will be considered – Sec.12 ). Part-time time employee, daily wage earner, sweeper, probationer are entitled but apprentices are not eligible. Minimum bonus – 8.33 % or Rs.100/- on completion of 5 years after 1st Accounting year even if there is no profit whichever is higher. It should not exceed 20 % of wages in any case.
Components of bonus – salary or wages includes dearness allowance, free food allowance or the value of such food when it is being paid in lieu of wages, but it does not include - over-time wages, house rent or other allowance, bonus, (including incentive, production and attendance bonus) or commission, T.A.,P.F- ESI contribution paid by the employer etc. Time limit – it should be paid in cash and within 8 months from the closing of the accounting year. Bonus is payable only on annual and not on half yearly basis. 68 Legal Aspects of Hospital Management – Dr. B.G. Maniar 3.9.3 Calculation of Bonus 1. Calculate the gross profit in the manner prescribed in – (a) First Schedule, in case of banking company; or (b) Second Schedule, in any other case. 2. Calculate the Available Surplus. (Sec. 5, 6 and 7) Available Surplus = A + B, where A = Gross Profit – Depreciation admissible u/s 32 of the Income Tax Act – Development rebate or investment allowance or development allowance – Direct Taxes payable for the accounting year ( calculated as per Sec. 7 ) – Sums specified in the Third Schedule. B = Direct Taxes ( calculated as per Sec. 7 ) in respect of gross profit for the immediately preceding accounting year – Direct Taxes in respect of such gross profit as reduced by the amount of bonus, for the immediately preceding accounting year. 3.9.4 Calculate Allocable Surplus. Allocable Surplus = 60 % of Available Surplus. (67 % - foreign co. )
Make adjustment for ‗Set-on and Set-off‘ as per Fourth Schedule. The Allocable Surplus so computed is distributed among the employees in proportion to salary or wages received by them during the relevant accounting year. ( Sec 2 (4) ) 69 Legal Aspects of Hospital Management – Dr. B.G. Maniar 3.9.5 Maintenance of Registers and Records, offences and Penalties A register showing the – - Computation of the Allocable Surplus referred to in Sec. 2(4) in Form A. - Set-on and Set-off of the Allocable Surplus, u/s 15, in Form B. - details of the amount of bonus due to each of the employees, the deductions u/s 17 and 18 and the amount actually disbursed, in Form C. ( Sec.26, Rule 4 ) 3.9.6 Offences
– contraventions of the provisions of the Act or Rules, and failure to comply with the directions or requisitions made – Imprisonment up to 6 months or fine up to Rs. 1,000/- or both. 3.9.7 Contracting out is void (Sec. 31A) 3.9.8 Deduction It is permissible for any financial loss caused by misconduct. 70 Legal Aspects of Hospital Management – Dr. B.G. Maniar 3.9.9 Forfeiture - if he is dismissed from service for fraud, riotous / violent behaviour / theft / misappropriation / sabotage of any property of the establishment, not only for the year in which he is so dismissed but also for the past years remaining unpaid to him. 3.10 The Equal Remuneration Act, 1976 3.10.1 Object – To provide equal remuneration to both male and female workers for the work of similar nature and to prevent discrimination on ground of sex against women in the matter of employment 3.10.2 Application - To almost all establishments Act shall have overriding effect on other law, agreement, award or contract of service notwithstanding anything inconsistent therein.
It is the duty of the employer to pay equal remuneration to both men and women for equal work, and shall not reduce the rate of remuneration only on the ground of sex. No discrimination in the matter of promotion, training or transfer except where employment of women is restricted.
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