The Payment Of Bonus Act 1965
- The practice of paying bonus in India appears to have originated during First World War when certain textile mills granted 10% of wages as war bonus to their workers in 1917. In certain cases of industrial disputes demand for payment of bonus was also included. In 1950, the Full Bench of the Labour Appellate evolved a formula for determination of bonus. A plea was made to raise that formula in 1959. At the second and third meetings of the Eighteenth Session of Standing Labour Committee (G. O.I.) held in New Delhi in March/April 1960, it was agreed that a Commission be appointed to go into the question of bonus and evolve suitable norms. To implement these recommendations the Payment of Bonus Ordinance, 1965 was promulgated on 29th May, 1965. To replace the said Ordinance the Payment of Bonus Bill was introduced in the Parliament.
STATEMENT OF OBJECT AND REASONS
- A Tripartite Commission was set by the Government of India by their resolution No.WB-20(9)/61, dated 6th December, 1961 to consider in a comprehensive manner, the question of payment of bonus based on profits to employees employed in establishments and to make recommendations to the Government.
ACT 21 OF 1965
- The Payment of Bonus Bill having been passed by both the Houses of Parliament received the assent of the President on 25th September, 1965. It came on the Statute Book as THE PAYMENT OFBONUS ACT, 1965 (21 of 1965).
LIST OF AMENDING ACTS
- The Insurance (Amendment) Act, 1968 (62 of 1968).
- The Payment of Bonus (Amendment) Act, 1969 (8 of 1969).
- The Central Labour Laws (Extension of Jammu And Kashmir) Act, 1970 (51 of 1970).
- The Payment of Bonus (Amendment) Act, 1972 (68 of 1972).
- The Payment of Bonus (Amendment) Act, 1973 (39 of 1973).
- The Payment of Bonus (Second Amendment) Act, 1973 (55 of 1973).
- The Payment of Bonus (Amendment) Act, 1974(42 of 1974).
- The Payment of Bonus (Amendment) Act, 1976(23 of 1976).
- The Payment of Bonus (Amendment) Act, 19 7 (43 of 1977) [as amended by the Payment of Bonus (Amendment) Act, 1978 (48of 1978) and the Payment of Bonus (Amendment) Act, 1980 (5 of 1980)].
- The Payment of Bonus (Second Amendment) Act, 1980 (66 of 1980).
- The National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981).
- The Payment of Bonus (Amendment) Act, 1985 (30 of 1985).
- The Payment of Bonus (Second Amendment) Act, 1985 (67of 1985).
- The National Housing Bank Act, 1987 (53 of 1987).
- The Small Industries Development Bank of India Act, 1989 (39 of 1989).
- The Payment of Bonus (Amendment) Act, 1995 (34 of 1995).
THE PAYMENT OF BONUS ACT, 1965, (21 of 1965)1
[25th September, 1965]
2[An Act to provide for the payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity and for matters connected therewith.]
BE it enacted by Parliament in the Sixteenth Year of the Republic of India as follows:
- Short title, extent and application
- Definition.– In this Act, unless the context otherwise requires-accounting year” means
- In relation to a corporation
- In relation to a company
- Establishments to include departments, undertakings and branches
- Computation of gross profits
- Computation of available surplus
- Sums deductible from gross profits
- Calculation of direct tax payable by the employer
- Eligibility for bonus
- Disqualification for bonus
- Payment of minimum bonus
- Payment of maximum bonus
- Calculation of bonus with respect to certain employees
- Proportionate reduction in bonus in certain cases
- Computation of number of working days
- Set on and set off of allocable surplus
- Special provisions with respect to certain establishment
- Adjustment of customary or interim bonus against bonus payable under the Act
- Deduction of certain amounts from bonus payable under the Act.
- Time-limit for payment of bonus
- Application of Act to establishments in public sector in certain cases
- Recovery of bonus due from an employer
- Reference of disputes under the Act
- Presumption about accuracy of balance-sheet and profit and loss account of corporation and companies
- Audited accounts of banking companies not to be questioned
- Audit of accounts of employers, not being corporations or companies
- Maintenance of register, records, etc.
- Offences by companies
- Cognizance of offences
- Protection of action taken under the Act
- Special provision with respect to payment of bonus linked with production or productivity
- Act not to apply to certain classes of employees
- Act to apply to certain pending disputes regarding payment of bonus
- Effect of laws and agreements inconsistent with the Act
- Power of exemption
- Power to remove difficulties
- Power to make rules
- Application of certain law not barred
- Repeal and saving