Tuesday, July 01, 2008

Bonus Act_Practical Problems_30

We are a factory, manufacturing engineering products. We have laid off workmen for 30 days in the year 2004, and paid them lay-off compensation as statutorily prescribed. Please advise us whether we should take into account lay-off compensation for computing bonus.

The definition of salary or wage under section 2(21) of the Bonus Act excludes only retrenchment compensation but not lay-off compensation. Further section 13 of the Bonus Act states that where an employee who is eligible for bonus remained absent from duty, the amount of bonus shall be proportionately reduced. Again, section 14 of the Act lays down that in arriving at the number of days for which an employee worked, an employee shall be deemed to be on duty on those days during which he is laid-off this support the view that lay-off compensation is not excluded from the purview of wages under the Bonus Act and therefore it shall be considered for computing bonus. Please refer to Mohan Kumar v. Dy. Labour Commissioner, 1996 II CLR 154 (Ker.DB)

No comments: