Download Payment of Bonus Act, 1965: Recommendations and Applicability and more Slides Compensation and Reward Management in PDF only on Docsity! Payment Of Binus Act • STATEMENT OF OBJECT AND REASONS • A Tripartite Commission was set by the Government of India ON 6th December, 1961 to consider, the question of payment of bonus based on profits . • The Commission’s Report containing their recommendations was received by the Government on 24th January, 1964. • On 2nd September, 1964, the Government announced acceptance of the Commission’s recommendations subject to a few modifications. the Payment of Bonus Ordinance, 1965, was promulgated on 29th May, 1965. COMMITTEE ON FAIR WAGES 1948 2 RECOMMENDATIONS OF COMMITTEE Society should aim at paying to each worker a LIVING WAGE. living wage should enable the worker to provide for himself and his family • Basic essentials of food, clothing and shelter • In addition measure of frugal comfort including education for children, protection against ill health, Leisure & Entertainment • Essential social needs. • Old Age provision & Insurance against other misfortunes. • Sharing of Profit • Wages:- include Base wage, dearness allowance , excludes Overtime & other perks/benefits/.(Rs 3500/- only) • Payment of Bonus:- minimum 8.33% -Max 20 % of standard wages. Max limited to allocable surplus. • Proportionate deduction if not worked for full year.(excluding-Laid off, leave with wages, maternity leave, accidental disability) • New Estt:-Bonus holiday for 5 Yrs if no profit. • Set off & set on • Provisions for PSUs:- Applicable only if selling certain goods or services in competition with private sector. Income from such sale is not less than 20 % of total Income. • Sec31A:-Bonus linked to production or productivity:- In lieu of profit linkage, linkage to production/productivity subject to Agreement with Unions. & payment of min Bonus. • Act not to apply to certain Estt listed in sec 32. Exempted establishments • employees employed by any insurer carrying on general insurance business and the employees employed by the Life Insurance Corporation of India; • (ii) Seamen • (iii) Employees registered under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948 • (iv) Employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a Local authority; • (v) Employees employed by -- • (a) The Indian Red Cross Society or any other institution of a like nature • (b) Universities and other educational institutions; • (c) Institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purposes of profit; • (vi) Employees employed through contractor on building operations; • (ix) Employees employed by -- • (a) any Financial Corporation • (c) the Deposit Insurance Corporation; • 5[(d) the National Bank for Agriculture and Rural Development;] • (e) the Unit Trust of India;
