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Explain the provisions of Payment of Bonus Act
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Hygiene and Environment (Sees. 11 to 20)
The Act has provided for the health of the workers while at work Sec. 11 provides that every factory must be kept clean.
Accumulated dirt and refuse must be removed daily. Floor of every workroom should be cleaned effectively. Drainage, urinals etc. must be kept clean and disinfectants shall be used, for the purpose.
Sec. 12 provides for disposal of wastes and affluents, Sec,13 requires maintenance of adequate ventilation and proper temperature and Sec.14 requires effective measures for prevention of inhalation or accumulation of dust and fumes in workroom Sec. 15 provides for the control of artificial humidification so that pure water is used for the purpose. Sec. 16 provides for avoiding overcrowding of any workroom of the factory Sec. XI provides for maintenance of sufficient and suitable lighting. Prevention of Tire, formation of shadows, Sec, 18 requires very factory lo make effective arrangements for sufficient supply ol pure drinking water. Provision of latrines and urinals (Sec. 19) separately for male and female workers and sufficient number of spit rooms (Sec. 20) are the other provision.
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The object of the Act is to provide for the payment of bonus lo persons employed in certain establishments and for matters connected therewith. The scheme of the Act, broadly staled, is four dimensional:
(1) to impose statutory liability upon an employer of every establishment covered by the Act to pay bonus to employees in the establishment;-
(2) to define the principle of payment of bonus according to the prescribed formula;
(3) to provide-for payment of minimum and maximum bonus and linking the payment of bonus with the scheme of ‘set-off and set-on'; and
(4) to provide machinery for enforcement of the liability for payment of bonus.
The Act is a comprehensive and exhaustive law dealing with bonus in all its aspects. An employee of an establishment to which the Act does not apply cannot claim bonus de hors the Act.
Every employee drawing a salary or wage not exceeding Rs.2, 500 p.m. and employed in any industrial establishment covered under the Act is entitled to payment of bonus under the Act. However, the bonus payable to an employee whose salary or wage exceeds Rs. 1,600 p.m. is to be calculated as if his salary or wage is exceeds Rs. 1,600 p.m. is to be calculated as if his salary or wage is Rs. 1,600 p.m. only.
Under Section 10 of the Payment of Bonus (Amendment) Act, 1980 every employer is bound to pay to every employee a minimum bonus of 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 12 in the accounting year. Where an employee has not completed fifteen years age at the beginning of the accounting year, the minimum bonus is 8.33 per cent 6f the salary or sixth rupees, whichever is higher.
Section 11 of the Act limits the maximum bonus to 20% of the wages. It says that if in any accounting year the allocable surplus exceeds the amount of minimum bonus payable to the employees the employer shall pay a higher bonus subject to a maximum of 20% of salary or wage.
Section 13 of the Act provides that 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 maybe, of sixty rupees, if such bonus is higher than 8.33 per cent of his wages for the days he has worked in that accounting year, shall be proportionately reduced. For example, an adult employee who worked only on 120 working days out of 240 yrs in an accounting year, will be entitled to 50% of the minimum bonus, i.e., Rs. 50 or 8.33 per cent of the wages earned by him during the accounting year whichever is higher.
The Act attempts to assure all workers of a minimum bonus even in lean years through the twin processes of "set-on" and "set-off'. If the allocable surplus in a year exceeds the amount of the maximum bonus stipulated by the Act, then the excess is to be carried forward lo the succeeding year to be utilised for paying bonus subsequently. This process is called "setting on’ of the allocable surplus. On the other hand, if there is no allocable surplus in a year or if the allocable surplus is insufficient to pay the workers even at the minimum rate in the year, the minimum bonus should nevertheless be paid to the workers and the resulting deficiency carried torward for being "set off' from the surplus of the subsequent years.
The Act permits employees to enter into any agreement or settlement with their employer for payment of bonus linked with production or productivity in lieu of bonus based on profits payable under this Act. Employees can also, with the previous approval of the Government, enter into agreement with their employer for granting them an amount of bonus under a formula which is different from that under this Act.
